Asian stocks (MXAP) advanced a second day, extending a rebound from last week’s losses, while the dollar and yen fell before Europe’s finance ministers meet to discuss the debt crisis and data on U.S. consumer confidence. Treasury 10-year notes headed for the longest losing streak in five weeks.
The MSCI Asia Pacific Index added 1.8 percent at 3:04 p.m. in Tokyo, adding to yesterday’s 2 percent advance. Standard & Poor’s 500 Index futures rose 0.6 percent. The Dollar Index slid a second day, the yen weakened 0.3 percent against the euro, and the won climbed after South Korea posted its biggest current- account surplus in a year. Treasury 10-year yields climbed three basis points to 2.01 percent. Oil retreated from a one-week high in New York. Copper snapped its biggest rally (SPX) in a month.
European finance ministers meet today to thrash out details on how to boost the European Financial Stability Facility, and Italy and Belgium will auction bonds. Moody’s Investors Service said it’s considering lowering debt ratings for the region’s banks. Data today may show U.S. consumer confidence climbed this month from a two-year low, while Australia’s government pledged to cut spending and Japan’s jobless rate rose.
“Europe has the financial means to respond” to the crisis, David Gaud, a senior portfolio manager at Edmond de Rothschild Asset Management, said in a Bloomberg Television interview from Hong Kong. “Where we stand now, we may see further volatility. But when I look at the valuation in the market, a lot has been priced in already.”
About four shares climbed for every one that declined on MSCI’s Asia Pacific Index, helping the gauge pare its November losses to 7.4 percent. The index trades at 12.4 times estimated profits, lower than the five-year average multiple of 16.7 times, data compiled by Bloomberg shows. Japan’s Nikkei 225 Stock Average rose 2 percent, South Korea’s Kospi index jumped 2.3 percent, while Australia’s S&P/ASX 200 Index added 1.1 percent.
Hitachi, Hyundai Mipo
Hitachi Ltd., a maker of nuclear power plants and consumer electronics, advanced 5.7 percent in Tokyo after Citigroup Inc. raised its rating on the company. Hyundai Mipo Dockyard Co. (010620) added 6.2 percent after Daishin Securities Co. said the stock is “compelling.”
The S&P 500 gained 2.9 percent yesterday, its biggest rally in a month, and the first increase in eight days, after the National Retail Federation said retail sales climbed 16 percent to a record over the Thanksgiving weekend. The Conference Board’s index of consumer confidence rose to 44 this month, according to the median estimate from 70 economists surveyed by Bloomberg. Separate data may show home prices in 20 U.S. cities probably fell at a slower pace.
‘Measurably Positive’
“The economic data are measurably positive and they have been for a while,” Stephen Wood, the New York-based chief market strategist for Russell Investments, which oversees about $163 billion, said in a Bloomberg Television interview. “That’s going to continue in 2012.”
Treasury 10-year notes fell a third day. Fitch Ratings gave U.S. sovereign debt a negative outlook while affirming its AAA grade. Treasuries have returned 3.8 percent through yesterday since S&P cut the U.S.’s top credit grade, according to Bank of America Merrill Lynch indexes.
The Dollar Index (DXY), which tracks the U.S. currency against those of six trading partners, declined 0.3 percent, extending yesterday’s 0.6 percent drop. The yen weakened 0.1 percent to 78.07 against the dollar after Japanese Finance Minister Jun Azumi said in parliament he was continuing efforts to keep currency levels appropriate.
The euro appreciated 0.3 percent to $1.3364, following a 0.6 percent increase yesterday. The 17-nation currency traded at 104.32 yen. Finance ministers will discuss in Brussels today how Europe’s bailout fund, the EFSF, could insure sovereign bonds of indebted states between 20 percent and 30 percent of each issue.
Europe’s Ratings
Moody’s said it’s considering lowering debt ratings for European banks amid the potential removal of government support. All subordinated, junior-subordinated and Tier 3 debt ratings of 87 banks in countries where the subordinated debt incorporates an assumption of government support were placed on review for downgrade, the ratings company said in a statement today.
The subordinated debt may be cut on average by two levels, while the rest of the debt by one grade, it said.
The won strengthened 0.8 percent to 1,145.15 per dollar. The Bank of Korea reported a surplus of $4.23 billion for October, compared with a revised $2.83 billion in September. The Australian dollar climbed 0.6 percent to 99.67 U.S. cents, reversing a drop of as much as 0.4 percent, while New Zealand’s currency increased 0.4 percent to 75.82 U.S. cents after earlier sliding 0.5 percent.
The cost of insuring Asia-Pacific corporate and sovereign debt declined, with the Markit iTraxx Japan index dropping eight basis points to 202 basis points as of 9:14 a.m. in Tokyo, Deutsche Bank AG prices show. That’s on course for its biggest daily decline since Oct. 28, according to data provider CMA, which is owned by CME Group Inc., and compiles prices quoted by dealers in the privately negotiated market.
Oil dropped from the highest close in more than a week before a report forecast to show that crude and gasoline stockpiles increased in the U.S. Crude for January delivery slipped 0.2 percent to $98.03 a barrel in New York, after advancing as much as 4.1 percent yesterday to $100.74.
Three-month copper decreased 0.4 percent to $7,467 a metric ton on the London Metal Exchange. Prices jumped 3.7 percent yesterday, the most since Oct. 27.
To contact the reporter 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
