Asian stocks rose, with a regional index advancing for the first time in five weeks, after Australia cut key interest rates by more than forecast and on signs manufacturing output in China and the U.S. is improving.
Commonwealth Bank of Australia, the nation’s biggest lender by market value, climbed 2 percent in Sydney. Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., advanced 3.9 percent in Hong Kong. Samsung Heavy Industries Co. (010140) jumped 6.4 percent in Seoul after South Korea’s No. 2 shipbuilder posted earnings that beat analysts’ estimates.
“We’re quite optimistic about Asia,” said Adrian Zuercher, who helps oversee $150 billion in asset allocation strategies at Credit Suisse Asset Management in Hong Kong. “It’s clear that China and the rest of Asia will be generating a higher growth rate compared to the rest of the world.”
The MSCI Asia Pacific Excluding Japan Index (MXAP) gained 0.3 percent to 438.58 this week. Japanese markets were closed for holidays on three of the five days. The gauge fell each of the previous four weeks, the longest such streak since November, on concern Europe will struggle to contain its debt crisis amid increasing opposition to proposed austerity measures.
Australia’s S&P/ASX 200 Index (AS51) climbed 0.8 percent this week after the Reserve Bank of Australia cut its benchmark interest rate by half a percentage point, more than most economists’ forecast. Traders wager there’s a 70 percent chance of an additional quarter-point cut in June, according to swaps data compiled by Bloomberg.
Australian Banks
Commonwealth Bank gained 2 percent to A$52.62. Westpac Banking Corp., Australia’s second-largest lender by market value, rose 1.4 percent to A$22.91.
South Korea’s Kospi Index (KOSPI) gained 0.7 percent. Taiwan’s Taiex Index jumped 3 percent. Hong Kong’s Hang Seng Index increased 1.7 percent, while China’s Shanghai Composite Index advanced 2.3 percent.
The MSCI Asia Pacific Index, which includes Japan, slipped 0.2 percent this week. The Nikkei 225 Stock Average fell 1.5 percent as the yen climbed for a second week. A stronger currency cuts the value of overseas earnings at Japanese exporters.
Exporters outside of Japan advanced as reports that showed China’s manufacturing expanded at the fastest pace in a year last month and production at U.S. factories unexpectedly rose, boosted confidence in the global economic recovery.
Exporters Advance
Li & Fung, which counts the U.S. as its biggest market, climbed 3.9 percent to HK$17.20 in Hong Kong. Yue Yuen Industrial Holdings Ltd., a maker of shoes for Nike Inc., rose 3.1 percent to HK$26.50. Techtronic Industries Co. (669), the Ryobi power tools maker that gets 73 percent of its sales from North America, jumped 7.3 percent to HK$10.14.
The MSCI Asia Pacific Ex-Japan Index has retreated 3.4 percent from this year’s peak at the beginning of March on speculation stocks gains have outpaced the prospects for earnings growth. Shares on the MSCI Asia Pacific Excluding Japan index are valued at an average of 11.9 times estimated earnings, compared with 13.2 on the Standard & Poor’s 500 Index and 10.8 for the Stoxx Europe 600 Index.
Samsung Heavy climbed 6.4 percent to 41,900 won in Seoul after the company posted first-quarter net income that exceeded analysts’ estimates by 56 percent. Bank of Communications Co. gained 2.1 percent to HK$5.91 after the Chinese lender reported first-quarter profit that topped expectations.
In Taiwan, Hon Hai Precision Industry Co. (2317), assembler of Apple Inc.’s iPhone and iPad, retreated 9.4 percent to NT$90 after posting first-quarter profit that missed analysts’ estimates.
Source: Bloomberg