Asian shares snapped three days of losses and commodities rose on speculation the Federal Reserve will take steps to bolster the U.S. recovery and as data showed China’s manufacturing shrank at a slower pace. U.S. and European stock futures rallied, while Treasuries and the dollar fell.
The MSCI Asia Pacific Index jumped 1.7 percent at 3:40 p.m. in Tokyo. Standard & Poor’s 500 Index futures added 1.3 percent, while Euro Stoxx 50 contracts increased 1.2 percent. Copper rose 1.3 percent, oil advanced for a second day in New York, while gold topped $1,910 an ounce for the first time. Treasury 10-year yields climbed two basis points, while the dollar weakened against 15 of its 16 major peers.
Asian shares are rebounding from the lowest levels since September before central bankers meet this week in Jackson Hole, Wyoming. Last year, Fed Chairman Ben S. Bernanke’s hint of a second round of asset purchases triggered a 28 percent rally in the S&P 500. Preliminary data showed an index of Chinese output may have climbed to 49.8 in August from 49.3 in July. Separate reports will probably show German manufacturing grew at a slower pace and U.S. home sales declined.
“All the focus is going to be on Friday’s presentation and what, if anything, Ben Bernanke is going to” do to shore up U.S. growth, said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which manages $54 billion. “It’s dangerous to presume we’re going to hear anything definitive. All in, things are going to remain fairly volatile,” he said in a Bloomberg Television interview.
‘Attractive’
About seven shares climbed for every two that fell on MSCI’s Asia Pacific Index, which yesterday dropped to its lowest level since Sept. 1. The gauge has retreated 13 percent this year, driving valuations down to 11.9 times estimated profits yesterday, the lowest level since November 2008, according to data compiled by Bloomberg.
“There seems to be a bit of bargain-hunting interest here after recent sell-offs left valuations quite attractive,” said Lim Chang Gue, a fund manager in Seoul at Samsung Asset Management Co., which oversees about $30 billion.
Japan’s Nikkei 225 Stock Average increased 1.2 percent, South Korea’s Kospi Index surged 3.9 percent and Australia’s S&P/ASX 200 Index climbed 2.2 percent. China’s Shanghai Composite Index rallied 1 percent after the manufacturing report from HSBC Holdings Plc and Markit Economics. The reading still indicates a second month of contraction. The final August figure is due Sept. 1.
Nikon, Foster’s
Nikon Corp., the world’s second-largest maker of single- lens reflex cameras, jumped 4.1 percent after raising its full- year profit forecast. Daewoo Engineering & Construction Co. surged 9.6 percent after Mirae Asset Securities Co. said South Korean builders may benefit from expected reconstruction in Libya, which is now mostly in rebel hands.
The S&P 500 closed less than 0.1 percent higher yesterday, paring a rally of as much as 2 percent. Losses accelerated in the last 15 minutes of trading after Reuters reported Goldman Sachs Group Inc. (GS) Chief Executive Officer Lloyd Blankfein hired a defense attorney, driving the shares down 4.7 percent. Bank of America Corp. retreated 7.9 percent, the most in the S&P 500, amid concern about the lender’s capital raising plans.
New home sales probably fell 0.6 percent in July from the previous month, when sales slid 1 percent, according to the median forecast of economists surveyed by Bloomberg. A separate survey showed the Richmond Fed’s index of manufacturing probably declined for a second month.
Jackson Hole
Amid evidence of a weakening U.S. recovery, central bankers will meet Aug. 26 at an annual conference sponsored by the Federal Reserve Bank of Kansas City. Bernanke said last year’s meeting the Fed was prepared to “do all that it can” to ensure economic recovery and suggested it would purchase more securities if growth slowed.
Treasury 10-year yields climbed to 2.13 percent. The rate rose four basis points yesterday on speculation of further stimulus. The Treasury will sell $35 billion of two-year notes today, another $35 billion of five-year securities tomorrow and $29 billion of seven-year debt on Aug. 25.
Copper for three-month delivery climbed to $8,832 a metric ton on the London Metal Exchange after data yesterday showed Chinese imports rebounded to the highest level since January. Zinc gained 1.5 percent, lead increased 1.7 percent, while nickel added 1 percent. S&P’s GSCI Index of 24 raw materials surged as much as 51 percent following Bernanke’s speech last year in Jackson Hole before peaking on April 8.
Oil, Gold
Oil for October delivery added 1.4 percent to $85.56 a barrel in New York, extending yesterday’s 2.4 percent gain. A government report tomorrow may show gasoline inventories shrank last week while crude stockpile rose. Wheat futures rallied 0.7 percent to $7.715 a bushel, a third day of advances. Gold for immediate delivery jumped as much as 0.8 percent to $1,913.50 an ounce before trading at $1,901.75.
The cost of insuring Asia-Pacific corporate and sovereign bonds against default increased. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan climbed 5 basis points to 159 basis points, according to Credit Agricole prices, and is set for its highest close since May 25, 2010, according to CMA prices in New York.
The Markit iTraxx Australia index advanced 6 basis points to 169 basis points, Credit Agricole CIB prices show. That will be its highest since July 22, 2009, according to CMA.
Aussie, Kiwi
The Australian dollar gained 0.6 percent to $1.0471, reversing a drop of as much as 0.2 percent, while New Zealand’s currency strengthened 0.6 percent to 82.95 U.S. cents. South Korea’s won appreciated 0.6 percent to 1,077.90 per dollar.
The euro traded at $1.4387 from $1.4358 in New York yesterday. A manufacturing purchasing managers’ index for Germany, Europe’s largest economy, fell to 50.6 in August from 52 the previous month, according to the median forecast of economists surveyed by Bloomberg News before Markit Economics releases the data. A reading above 50 signals an expansion.
The ZEW Center for European Economic Research in Mannheim will probably say its index of German investor and analyst expectations, which aims to predict developments six months in advance, fell to minus 26 in August from minus 15.1 in July, according to a separate Bloomberg survey.
The yen was at 76.76 per dollar, little changed from yesterday. It strengthened to a post-World War II record of 75.95 on Aug. 19. Japanese Finance Minister Yoshihiko Noda said excessive movements in the yen can hurt the nation’s recovery, raising prospects officials will act to curb gains.
To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net.
To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net
