BLBG: Stocks, Copper Rally on Economic Growth, Greece; Yen Weakens
By Darren Boey and Anna Kitanaka
April 26 (Bloomberg) -- Stocks climbed, led by the biggest gain in the Nikkei 225 Stock Average in seven weeks, and commodities rallied as economic reports pointed to faster growth and concerns about Greece’s debt abated. The yen weakened.
The MSCI Asia Pacific Index increased 1.6 percent to 127.25 and the Stoxx Euro 600 rose 1 percent to 270.14 as of 4 p.m. in Tokyo. The Nikkei jumped 2.3 percent, the most since March 5. Standard & Poor’s 500 Index futures gained 0.1 percent. The yen fell to 125.96 per euro in Tokyo from 125.73 yen in New York on April 23. Oil in New York rose 0.4 percent to $85.42 a barrel, extending a 1.7 percent advance from April 23. Copper climbed 1.2 percent and rubber gained 1.6 percent.
Investor sentiment improved after Greece moved toward securing a financial rescue package and a forecast for Toyota Motor Corp.’s results indicated it may post an unexpected operating profit versus an operating loss for the fiscal year. Sales of new U.S. homes surged 27 percent in March and orders for most durable goods climbed, reports on April 23 showed.
“The economic data has certainly outperformed a lot of some people’s very skeptical expectations,” said Tim Leung, who helps manage about $1.5 billion at IG Investment Ltd. in Hong Kong. “There are good statistics coming out of the U.S. in terms of economic recovery. We are cautiously optimistic.”
The Nikkei’s increase was the largest among benchmark gauges in the Asia-Pacific region. Hong Kong’s Hang Seng Index climbed 1.5 percent and Taiwan’s Taiex advanced 1.9 percent.
Japanese Exporters
Toyota Motor Corp., the world’s largest carmaker, jumped 3.4 percent to 3,690 yen in Tokyo. The carmaker probably had operating profit of as much as 50 billion yen ($531 million) for the year ended March 31, Nikkei English News reported on April 24. The company on Feb. 4 forecast an operating loss of 20 billion yen. Toyota spokeswoman Ririko Takeuchi declined to comment.
Japanese exporters also advanced as the dollar strengthened after U.S. sales of new homes gained faster than estimated, boosting optimism in an economic recovery. Canon Inc., a camera maker that got 29 percent of its 2009 sales in the Americas, climbed 3.5 percent to 4,395 yen. In Seoul, LG Innotek Co., a South Korean maker of electronic parts, surged 9.6 percent to 159,500 won, set for the highest close since Sept. 7, after first-quarter profit more than doubled.
Sales of new U.S. homes soared 27 percent in March, climbing the most in 47 years to a level that surpassed the highest forecast of economists surveyed by Bloomberg News. Orders for goods meant to last at least three years, excluding cars and aircraft, gained 2.8 percent.
Weaker Yen
The yen fell against all of its major counterparts after a report showed U.K. house prices rose for a ninth straight month and before data forecast to show the U.S. housing market is stabilizing. Japan’s currency sank 0.4 percent to 87.496 against the Australian dollar, the weakest since September 2008. The yen weakened to 94.27 per dollar from 93.97 yen in New York.
“Data across the globe underscore the economy is recovering, which then boosts risk sentiment,” said Koichi Kurose, chief strategist in Tokyo at Resona Bank Ltd., a unit of Japan’s fourth-largest banking group. “Buoyant risk sentiment will encourage investors to sell the yen and re-invest in higher-yielding assets.”
The pound climbed 0.8 percent to 145.61 yen, the highest level since Jan. 27, after London-based Hometrack Ltd. said today the average cost of a home in England and Wales increased 0.2 percent in April from the previous month. Sterling rose to $1.5447 from $1.5377 on April 23.
Emerging Markets
The S&P/Case-Shiller home-price index in the U.S. climbed 1.3 percent in February, the first increase since December 2006, a Bloomberg News survey of economists showed ahead of the data’s release tomorrow.
Asian emerging-market currencies climbed as improving economic data globally boosted Asia’s trade outlook and increased demand for the region’s currencies.
“The dollar is under pressure across the board,” said Gerrard Katz, Hong Kong-based head of foreign-exchange trading at Standard Chartered Plc. “Data continues to improve in general. Risk appetite trades are doing well at the moment.”
The South Korean won climbed 0.5 percent to 1,103.80 per dollar and the Malaysian ringgit gained 0.4 percent to 3.1778. Twelve-month non-deliverable yuan forwards climbed 0.1 percent to 6.6068 per dollar, reflecting bets the currency will strengthen 3.3 percent from the spot rate of 6.827.
China Stimulus
Chinese officials this weekend pledged to extend their “proactive” fiscal measures and maintain a “relatively easy” monetary policy, saying the global economic recovery remains tentative. China will announce in August a new stimulus package of possibly 4 trillion yuan ($586 billion), the China Business newspaper reported on its Web site. Calls to Li Pumin, a spokesman for the National Development and Reform Commission, weren’t answered today.
Copper rose for a second day as Greece moved toward securing an emergency aid package. Three-month copper on the London Metal Exchange advanced to $7,840 a metric ton.
Greece’s Finance Minister George Papaconstantinou said money will be available “rather soon” and his country wouldn’t restructure its debt. He was speaking to reporters in Washington yesterday as he negotiated a three-year loan plan with the International Monetary Fund and European governments.
Crude oil rose for a fifth day on speculation demand will increase as the world economy recovers from recession.
“Data on the economic side, especially in the U.S., are getting much, much better than expected,” said Tetsu Emori, a commodity fund manager at Astmax Co. in Tokyo. “Ninety could be reachable, but over $90 to $95 would probably be difficult unless there are more strong factors on the fundamental side appearing.”
Treasuries fell for a third day, the longest run of losses in two weeks, as the U.S. prepared to sell a record $129 billion of notes this week. The yield on the 10-year note rose one basis points to 3.82 percent, according to BGCantor Market Data.
The Federal Reserve has kept its target rate in a range of zero to 0.25 percent since December 2008. Policy makers will complete their next meeting on April 28.
To contact the reporter for this story: Darren Boey at dboey@bloomberg.net; Anna Kitanaka in Tokyo at akitanaka@bloomberg.net.
