Asian Stocks Rise on U.S. Budget Remarks, Japan Stimulus
Asian stocks rose as U.S. lawmakers said they’re optimistic for an agreement to avoid automatic spending cuts and tax increases and as the leader of Japan’s opposition party called for unlimited monetary policy easing.
Honda Motor Co., a carmaker that gets 44 percent of its sales in North America, gained 2 percent in Tokyo. Sky Network Television Ltd., New Zealand’s largest pay-TV operator, jumped the most in more than a year in Wellington after announcing a special dividend. Starpharma Holdings Ltd. (SPL) tumbled 29 percent in Sydney after the biotechnology company said it won’t file an application for a new drug in the U.S. after a disappointing clinical trial.
The MSCI Asia Pacific Index gained 1 percent to 124.25 as of 7:03 p.m. in Tokyo, with more than three stocks climbing for each that fell. The gauge rose 13 percent through yesterday from this year’s low on June 4 as central banks added stimulus to spur growth and data showed a slowdown in China may be ending.
“Market expectations are that the U.S. cutbacks will be watered down and spread over several years,” said Matthew Sherwood, head of markets research at Perpetual Investment, which manages about $25 billion. “If the cliff is successfully flattened out over several years, the U.S. recession feared by markets is unlikely to occur.”
Japan’s Nikkei 225 Stock Average (NKY) gained 1 percent, with the broader Topix Index also adding 1 percent. The Topix may surge 19 percent in 2013 on compelling valuations and a possible change in political leadership in Japan, Goldman Sachs Group Inc. strategist Kathy Matsui wrote in a report today.
If the Liberal Democratic Party takes power in the election as polls suggest, “we would expect policies aimed at combating deflation, including public works investment, possible corporate tax cuts and a re-think of the nuclear phase-out plan,” Matsui wrote in the note. LDP leader Shinzo Abe, frontrunner to become the next prime minister, reiterated calls today for unlimited monetary easing until inflation reaches 2 percent.
Hong Kong’s Hang Seng Index rose 1 percent and the Shanghai Composite Index slid 0.5 percent. South Korea’s Kospi Index (KOSPI) advanced 1.2 percent. Singapore’s Straits Times Index gained 1.1 percent and Taiwan’s Taiex rose 0.9 percent.
Australia’s S&P/ASX 200 Index gained 0.7 percent as a report showed the nation’s sales of newly built homes rose for the first time in four months in October, indicating the central bank’s interest-rate reductions are luring buyers.
Futures on the Standard & Poor’s 500 Index rose 0.6 percent today. The gauge climbed 0.8 percent yesterday, reversing earlier declines, after Republican House Speaker John Boehner said he was optimistic budget talks can avert more than $600 billion in automatic tax increases and spending cuts next year.
Carmakers accounted for some of the the largest gains on the MSCI Asia Pacific (MXAP) Index. Honda gained 2 percent to 2,726 yen. Kia Motors Corp. (000270) advanced 4.7 percent to 62,000 won and Hyundai Motor Co. climbed 2.7 percent to 230,500 won in Seoul on expectations for rising sales in the so-called BRIC countries of Brazil, Russia, India and China.
Sky Network Television advanced 3 percent to NZ$5.22, the largest gain since October 2011. Sky will make a 32 New Zealand cents-a-share distribution next month, the Auckland-based company said in a statement. The company is 44 percent owned by Rupert Murdoch’s News Corp.
Luk Fook Holdings Ltd. (590) soared 10 percent to HK$23.15 after profit at the jeweler topped estimates. Chow Tai Fook Jewellery Group Ltd. advanced 5.4 percent to HK$10.86.
Aristocrat Leisure Ltd. gained 6.6 percent to A$3.25, the biggest rally across three days since 2008. Credit Suisse Group AG (ALL) upgraded its recommendation on the shares after the gaming- machine maker yesterday reported full-year profit that topped forecasts.
Sharp Corp. added 3.1 percent to 169 yen after the Wall Street Journal reported that the TV maker is in talks with Dell Inc. for an investment of as much as $240 million. Shares of Japan’s biggest maker of liquid-crystal-display panels have tumbled 75 percent this year, making it the world’s worst- performing major stock.
Starpharma slumped 29 percent to A$1.15, its biggest decline in more than nine years. The biotechnology company won’t be seeking U.S. approval for its VivaGel drug after the women’s treatment failed clinical trials.
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