By -
Dec 10, 2012
Asian stocks rose, with a regional
index excluding Japan heading for its highest close in 16
months, ahead of a Federal Reserve policy meeting and as
investors await progress on U.S. budget talks.
BHP Billiton Ltd., the world’s biggest mining company, added 1.4 percent in Sydney after metal prices rose. Renesas Electronics Corp. jumped 4.2 percent as the Japanese chipmaker said it will sell at least 150 billion yen ($1.8 billion) of new shares to a government-backed fund and customers as part of a bailout plan. Kansai Electric Power Co. sank 5.9 percent to lead Japanese utilities lower after regulators said an active earthquake fault may be running under a nuclear reactor.
The MSCI Asia Pacific Excluding Japan Index (MXAPJ) added 0.2 percent to 459.95 as of 1:08 p.m. Tokyo time, heading for its highest close since Aug. 3, 2011. About four shares rose for every three that fell. The gauge climbed the past three weeks on signs of recovery in the world’s two largest economies and optimism U.S. lawmakers will make a budget deal to avert the so- called fiscal cliff.
“The only risk would be is if there’s no resolution of the U.S. fiscal cliff, but I think that’s unlikely,” said Shane Oliver, Sydney-based head of strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “The more likely scenario is that shares continue to rise next year as the U.S. economy picks up momentum.”
Australia’s S&P/ASX 200 Index (AS51) gained 0.4 percent, while Singapore’s Straits Times Index advanced 0.5 percent. South Korea’s Kospi Index added 0.1 percent. Hong Kong’s Hang Seng Index climbed 0.2 percent, erasing losses of 0.2 percent. Japan’s Nikkei 225 Stock Average slipped 0.3 percent.
“The market needs to take a breather here after its decent rally,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “The market will probably continue to go up after the consolidation given the recent positive signs that the economy is bottoming out.”
Indicators are giving a mixed picture of the outlook for the world’s second-biggest economy, with China’s exports rising less than forecast last month even as industrial output accelerated.
Federal Reserve policy makers begin a two-day meeting today that will be followed by updated projections on economic growth, unemployment, inflation and interest rates on Dec. 12. Fed officials are considering whether to supplement $40 billion a month of mortgage-bond purchases with Treasury purchases when their Operation Twist program expires at the end of the month.
Separately, U.S. lawmakers need to agree on a budget to prevent more than $600 billion of automatic tax increases and spending cuts from coming into effect next year. President Barack Obama and Republican House Speaker John Boehner met one- on-one at the weekend at the White House. Representatives for the two said in statements afterward that “the lines of communication remain open.”
Raw-material producers advanced. The London Metals Exchange Index (LMEX), which tracks the prices of commodities from aluminum to copper, climbed 1.9 percent yesterday, extending gains for a second day.
BHP Billiton gained 1.4 percent to A$35.445 in Sydney. Rio Tinto Group, the world’s second-biggest mining company, added 0.8 percent to A$61.81.
Renesas advanced 4.2 percent to 321 yen in Tokyo. The chipmaker will sell 150 billion yen of new shares to a group led by Innovation Network Corp. of Japan, making the government- backed fund its biggest shareholder with a 69 percent stake, as part of a bailout plan.
Skyworth Digital Holdings Ltd. (751) rose 3.2 percent to HK$4.22 in Hong Kong after saying total television sales increased 44 percent in November from a year earlier.
Japanese utilities declined. The Nuclear Regulation Authority said earthquake risk may prevent the restart of a reactor operated by the Japan Atomic Power Co.
Kansai Electric dropped 5.9 percent to 730 yen. Chubu Electric Power Co. slid 4.9 percent to 1,032 yen. Tokyo Electric Power Co. (9501), owner of the power plant at the center of last year’s nuclear disaster, fell 2.1 percent to 137 yen.
“Prospects for restarting the nuclear reactors are slowly being squashed, and that’s going to increase the cost of electricity,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. in Tokyo, which has about $400 billion in assets.
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
BHP Billiton Ltd., the world’s biggest mining company, added 1.4 percent in Sydney after metal prices rose. Renesas Electronics Corp. jumped 4.2 percent as the Japanese chipmaker said it will sell at least 150 billion yen ($1.8 billion) of new shares to a government-backed fund and customers as part of a bailout plan. Kansai Electric Power Co. sank 5.9 percent to lead Japanese utilities lower after regulators said an active earthquake fault may be running under a nuclear reactor.
The MSCI Asia Pacific Excluding Japan Index (MXAPJ) added 0.2 percent to 459.95 as of 1:08 p.m. Tokyo time, heading for its highest close since Aug. 3, 2011. About four shares rose for every three that fell. The gauge climbed the past three weeks on signs of recovery in the world’s two largest economies and optimism U.S. lawmakers will make a budget deal to avert the so- called fiscal cliff.
“The only risk would be is if there’s no resolution of the U.S. fiscal cliff, but I think that’s unlikely,” said Shane Oliver, Sydney-based head of strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “The more likely scenario is that shares continue to rise next year as the U.S. economy picks up momentum.”
Australia’s S&P/ASX 200 Index (AS51) gained 0.4 percent, while Singapore’s Straits Times Index advanced 0.5 percent. South Korea’s Kospi Index added 0.1 percent. Hong Kong’s Hang Seng Index climbed 0.2 percent, erasing losses of 0.2 percent. Japan’s Nikkei 225 Stock Average slipped 0.3 percent.
Chinese Loans
China’s Shanghai Composite Index (SHCOMP) slid 0.4 percent after climbing 2.7 percent the past two days. New lending by the country’s banks increased to 522.9 billion yuan ($84 billion) in November. That compares with 562.2 billion yuan a year earlier and the 550 billion yuan median estimate by 30 economists surveyed by Bloomberg.“The market needs to take a breather here after its decent rally,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “The market will probably continue to go up after the consolidation given the recent positive signs that the economy is bottoming out.”
Indicators are giving a mixed picture of the outlook for the world’s second-biggest economy, with China’s exports rising less than forecast last month even as industrial output accelerated.
U.S. Futures
Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The gauge gained less than 0.1 percent yesterday as economic data in China beat estimates and investors weighed prospects for a U.S. budget deal.Federal Reserve policy makers begin a two-day meeting today that will be followed by updated projections on economic growth, unemployment, inflation and interest rates on Dec. 12. Fed officials are considering whether to supplement $40 billion a month of mortgage-bond purchases with Treasury purchases when their Operation Twist program expires at the end of the month.
Separately, U.S. lawmakers need to agree on a budget to prevent more than $600 billion of automatic tax increases and spending cuts from coming into effect next year. President Barack Obama and Republican House Speaker John Boehner met one- on-one at the weekend at the White House. Representatives for the two said in statements afterward that “the lines of communication remain open.”
Budget Negotiations
“The market now seems stuck in a trading range until news from Washington about any progress or deterioration in budget negotiations is released,” said Matthew Sherwood, head of markets research at Perpetual Investment, which manages about $25 billion in Sydney.Raw-material producers advanced. The London Metals Exchange Index (LMEX), which tracks the prices of commodities from aluminum to copper, climbed 1.9 percent yesterday, extending gains for a second day.
BHP Billiton gained 1.4 percent to A$35.445 in Sydney. Rio Tinto Group, the world’s second-biggest mining company, added 0.8 percent to A$61.81.
Renesas advanced 4.2 percent to 321 yen in Tokyo. The chipmaker will sell 150 billion yen of new shares to a group led by Innovation Network Corp. of Japan, making the government- backed fund its biggest shareholder with a 69 percent stake, as part of a bailout plan.
Skyworth Digital Holdings Ltd. (751) rose 3.2 percent to HK$4.22 in Hong Kong after saying total television sales increased 44 percent in November from a year earlier.
Earthquake Risk
The MSCI Asia Pacific Index advanced 11 percent this year through yesterday as central banks from Europe, the U.S., Japan and China took steps to support economic growth. That compares with a 13 percent gain for the S&P 500 and 14 percent for the Stoxx Europe 600 Index. The Asian gauge traded at 14.2 times estimated earnings, compared with 13.7 times for the S&P 500 Index and 12.6 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.Japanese utilities declined. The Nuclear Regulation Authority said earthquake risk may prevent the restart of a reactor operated by the Japan Atomic Power Co.
Kansai Electric dropped 5.9 percent to 730 yen. Chubu Electric Power Co. slid 4.9 percent to 1,032 yen. Tokyo Electric Power Co. (9501), owner of the power plant at the center of last year’s nuclear disaster, fell 2.1 percent to 137 yen.
“Prospects for restarting the nuclear reactors are slowly being squashed, and that’s going to increase the cost of electricity,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. in Tokyo, which has about $400 billion in assets.
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
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