Asian Stocks Rise on Applied Materials Forecast; Euro Declines

Aug. 19 (Bloomberg) -- Asian stocks rose after Applied Materials Inc. forecast higher-than-estimated profit, adding to signs demand is recovering for the region’s chipmakers. The Malaysian ringgit and Taiwan dollar climbed.

The MSCI Asia Pacific Index gained 0.3 percent to 119.38 as of 10:49 a.m. in Tokyo. Futures on the Standard & Poor’s 500 Index rose 0.1 percent. Malaysia’s ringgit advanced to the strongest level since October 1997 after the central bank relaxed currency controls and reported better-than-expected economic growth. The euro weakened for a second day on speculation Europe’s rebound is flagging.

Technology stocks accounted for a third of the MSCI Asia- Pacific Index rally as Applied Materials, the world’s largest producer of chipmaking equipment, reported “strong” orders from all of its customers. Japanese shares rose for a second day and government bonds fell on speculation policy makers will introduce measures to stimulate the economy.

“I’m telling people not to be too pessimistic,” said Kenji Sekiguchi, general manager of strategic research and investment at Mitsubishi UFJ Asset Management Co., which oversees about $73 billion in Tokyo. “The market in the second half of this year will reflect positive earnings more explicitly than the latest earnings season.”

A measure of technology shares in the MSCI Asia Pacific increased 0.7 percent, the most among 10 industries in the index. Japan’s Nikkei 225 Stock Average increased 0.7 percent and South Korea’s Kospi index climbed 0.8 percent.

Chip Stocks

Tokyo Electron Ltd., the No. 2 maker of chip making machinery, climbed 4.3 percent. Hynix Semiconductor Inc., the world’s second-largest maker of computer-memory chips, jumped 3 percent in Seoul. Applied Materials said profit in the current period will be 28 cents to 32 cents a share, excluding certain items, compared with an average estimate of 26 cents in a Bloomberg survey.

In Australia, Brambles Ltd., the world’s biggest supplier of wooden pallets, gained 5.7 percent to A$5.60. The company said full-year profit was $448.8 million, exceeding the average forecast of $427 million from four analyst estimates compiled by Bloomberg.

The S&P 500 rose 0.2 percent yesterday, reversing earlier losses as homebuilders rallied after Citigroup Inc. said takeovers in the industry may increase and Target Corp. said third-quarter earnings will match analysts’ estimates.

Mitsubishi Estate Co., Japan’s biggest property developer, jumped 3.8 percent after the Yomiuri newspaper said the housing- loan agency will extend low mortgage rates. Fanuc Ltd., an industrial robot maker that earns almost 80 percent of its revenue abroad, rose 1.6 percent after the Sankei newspaper said the central bank will seek to weaken the yen.

Japan Stimulus

Japan’s 10-year government bonds fell for the first time in seven days. The yield advanced as much as two basis points to 0.92 percent at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The Bank of Japan may increase the amount of a corporate loan program to 30 trillion yen ($351 billion) from 20 trillion yen, Sankei reported today, without saying where it got the information. The duration of the loan may be doubled to six months, the report said.

The cost of protecting Asia-Pacific bonds from non-payment declined, according to traders of credit-default swaps. The Markit iTraxx Japan index dropped 2 basis points to 111 basis points, Morgan Stanley prices show. Credit-default swap indexes are benchmarks for protecting bonds against default and traders use them to speculate on credit quality.

Currencies Rally

Taiwan’s dollar gained 0.3 percent to NT$31.89. Gross domestic product increased 10.2 percent in the second quarter after having expanded 13.3 percent in the first, economists forecast before a government report due today.

The ringgit advanced 0.4 percent to 3.1283 per dollar. Bank Negara Malaysia said late yesterday local companies can use ringgit to settle cross-border transactions. Gross domestic product rose 8.9 percent in the second quarter, more than the 8.4 percent gain forecast by economists in a Bloomberg survey.

The euro dropped against 13 of its 16 major counterparts after Germany’s Der Spiegel magazine reported that social tensions are rising in Greece as austerity measures shrink the economy. A German producer price index rose 0.1 percent in July after gaining 0.6 percent the previous month, according to a Bloomberg News survey of economists before today’s report. Europe’s currency slipped to $1.2808 from $1.2853 yesterday in New York and slid to 109.61 yen from 109.84 yen.

“The fundamentals of most of the euro zone haven’t really improved,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. based in Tokyo.

Wheat for December delivery advanced for a second day as its 19 percent decline from the highest level in almost two years attracted investors. The grain rallied as much as 2.2 percent to $7.0375 a bushel on the Chicago Board of Trade.

Oil was near the lowest in two days after the U.S. government said total petroleum stockpiles surged to the highest level in at least 20 years. Crude for September delivery fell 16 cents to $75.26 a barrel on the New York Mercantile Exchange.