Asian Stocks Gain for Eighth Week on U.S. Jobless Report, Greece Austerity
Monday, 13 February 2012 | 00:00
Asian stocks rose for an eighth week, with the regional index capping its longest streak of weekly advances since 2005, after the U.S. jobless claims unexpectedly dropped and Greek political leaders struck a deal on a package of austerity measures.
Li & Fung Ltd., the world’s biggest supplier to Wal-Mart Stores Inc., gained 2.9 percent this week in Hong Kong. Toyota Motor Corp. (7203), Asia’s biggest carmaker by market value, climbed 5.6 percent in Tokyo. Tohoku Electric Power Co. surged 29 percent after resuming operation of a unit damaged by Japan’s March earthquake. Cosco Pacific Ltd., the terminal arm of China’s biggest shipping group, rose 5.2 percent in Hong Kong after a gauge of cargo rates snapped its seven-week decline.
“You had increases in most equity markets across Europe and a very small increase in the U.S. It’s a good point for Asia,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “Greece reached some sort of agreement, but it’s still up for negotiation whether the rest of the European authorities will accept that agreement.”
The MSCI Asia Pacific Index climbed 0.4 percent to 124.85 this week, extending its winning streak to the longest since December 2005, after both the unemployment rate and jobless claims unexpectedly dropped in the U.S.
European finance chiefs’ refusal to deliver the bailout reflects frustration with Greece’s bickering politicians and the prospect that they may again backtrack on austerity measures not yet passed into law. Prime Minister Lucas Papademos agreed with political parties on budget cuts required for the 130-billion- euro ($172 billion) financing package. The deal has yet to be voted on.
Japan’s Nikkei 225 Stock Average gained 1.3 percent, while the broader Topix Index advanced 2.4 percent. South Korea’s Kospi Index climbed 1.1 percent this week and the China’s Shanghai Composite Index (SHCOMP) added 0.9 percent. Singapore’s Straits Times Index rose 1.4 percent. Hong Kong’s Hang Seng Index (HSI) added 0.1 percent, while Australia’s S&P/ASX 200 Index slid 0.1 percent.
Last week’s (Feb. 3) U.S. Labor Department announcement that the jobless rate fell to a three-year low of 8.3 percent in January sent stocks higher. Also, the government on Feb. 9 showed the number of Americans filing first-time claims for unemployment insurance payments unexpectedly declined last week, indicating the labor market recovery is gaining traction.
Li & Fung, which generates 65 percent of sales in the U.S., gained 2.9 percent to HK$17.86 this week in Hong Kong. Toyota, which gets more than 70 percent of its revenue overseas, jumped 5.6 percent to 3,060 yen in Tokyo. Man Wah Holdings Ltd., a Hong Kong-based exporter of sofas, jumped 29 percent as it canceled repurchased shares.
Among the MSCI Asia index’s 10 industry groups, utilities gained the most in the benchmark this week. Tohoku Electric (9506) surged 29 percent to 920 yen in Tokyo, leading power companies higher, after saying it resumed commercial operation ahead of schedule at the Sendai No. 4 thermal unit, damaged by Japan’s earthquake. Separately, the utility said it restarted a Niigata thermal power plant, which was automatically halted by a faulty pressure transmitter on Feb. 8.
Kansai Electric Power Co. soared 13 percent to 1,351 yen this week as the Yomiuri newspaper reported on Feb. 9 a government nuclear safety agency’s approval is near on reactors run by the utility. The agency submitted a final draft of an evaluation report that approves stress test results for the No. 3 and 4 reactors at the Oi nuclear power plant run by Kansai Electric.
This week, the Baltic Dry Index (BDIY), a gauge of cargo rates, jumped 7.4 percent, snapping its seven week losing streak. Cosco Pacific jumped 5.2 percent to HK$12.10 in Hong Kong. Nippon Yusen K.K. (9101) and Mitsui O.S.K. Lines Ltd. (9104), Japan’s two biggest shipping lines by sales, both rose at least 4.6 percent in Tokyo this week.
Shipping companies also got a boost after carriers announced plans to raise Asia-U.S. cargo rates for the second time this year. Members of the Transpacific Stabilization Agreement yesterday said they would seek a $300 increase per 40- foot box next month after “successfully” pushing through a boost in January.
The benchmark Asian index gained 9.7 percent this year through yesterday, compared with 6.8 percent advances by both the Standard & Poor’s 500 Index and the Stoxx Europe 600 Index.
Stocks on the Asian gauge were valued at 14 times estimated earnings on average, compared with 12.8 times for the S&P 500 and 10.8 times for the Stoxx 600. More than half of the companies on the MSCI Asia Pacific Index (MXAP) that reported earnings since Jan. 9 missed estimates, according to data compiled by Bloomberg.