Asian Stocks Swing Between Gains, Losses on European Debt, U.S. Outlook By Jonathan Burgos - Jan 22, 2012

Asian stocks swung between gains and losses as increasing home sales in the U.S. added to signs the world’s biggest economy is recovering, overshadowing uncertainties over continuing debt negotiations in Greece.

BHP Billiton Ltd. (BHP), the world’s biggest mining company and Australia’s largest oil producer, lost 0.9 percent in Sydney after crude and metal futures dropped. Canon Inc. (7751), the Japanese camera maker that gets one-third of sales from Europe, fell 0.7 percent in Tokyo. Olympus Corp., the world’s No. 1 maker of endoscopes, jumped 7.7 percent after it was allowed to keep its stock market listing following an accounting fraud that cut the company’s market value by about $4 billion.

“The market could come under short-term pressure as it’s had a strong run this year,” said Nader Naeimi, a Sydney-based senior strategist at AMP Capital Investors Ltd., which manages nearly $100 billion. “Any weakness is a good buying opportunity given improving economic data out of the U.S. Greece can go hot and cold very quickly. Greece defaulting is still a possibility.”

The MSCI Asia Pacific Index rose 0.1 percent to 120.81 as as of 11:06 a.m. in Tokyo, having swung between gains and losses at least seven times. About the same number of shares rose and fell in the measure. The gauge completed its longest streak of weekly gains last week as U.S. reports showed the world’s biggest economy is recovering and falling European borrowing costs signaled the debt crisis may be easing.

Japan’s Nikkei 225 Stock Average gained 0.2 percent, reversing losses of as much as 0.3 percent. Australia’s S&P/ASX 200 Index lost 0.3 percent. Markets in China, Hong Kong, Indonesia, Malaysia, Philippines, South Korea, Singapore and Taiwan are closed today for holidays.

U.S. Futures

Futures on the Standard & Poor’s 500 Index slipped 0.4 percent today. The gauge added 0.1 percent in New York on Jan. 20, erasing a loss in the final minutes of trading, as banks gained and results from International Business Machines Corp. and Intel Corp. boosted technology shares.

Raw-material producers dropped as crude oil fell for a fourth day ahead of a meeting of European leaders to discuss measures to tackle a debt crisis that may curb demand for commodities, and sanctions on Iran that may disrupt Middle East crude supplies. The London Metals Exchange Index, which tracks prices of commodities from aluminum to copper, fell for the first time in five days on Jan. 20.

Companies that receive revenue from Europe declined before a European Union meeting today aimed at crafting a long-term plan to tackle the region’s debt crisis as banking and government negotiators continue trying to reach an agreement that will lighten Greece’s debt burden.

U.S. Home Sales

Exporters to the U.S. advanced as sales of previously owned U.S. homes rose for a third month in December to the highest level since January 2011, a sign the housing market ended last year with momentum.

The MSCI Asia Pacific Index (MXAP) gained 6 percent this year through Jan. 20, compared with gains of 4.6 percent by the S&P 500 and 4.6 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 1.3 times book value. That compares with 2.1 times for the Standard & Poor’s 500 Index in the U.S. and 1.4 times for the Europe Stoxx 600 Index in Europe.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net
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