BLBG:Asian Stocks Rise As Euro Leaders Drop Spain Conditions
Asian stocks climbed, with the regional benchmark index posting its biggest gain in three weeks, after European leaders meeting in Brussels agreed to ease repayment rules to Spanish banks and make it easier to recapitalize the region’s troubled lenders.
Westpac Banking Corp. (WBC) rose 1.4 percent in Sydney as banks provided the biggest support to the Asian benchmark after leaders of the 17 euro countries dropped a requirement that governments get preferred creditor status on crisis loans to Spain’s banks. Toyota Motor Corp. (7203) advanced 2.4 percent, leading gains among Japanese exporters. BHP Billiton Ltd. (BHP), the world’s largest mining company, climbed 2.6 percent as metals prices soared.
The MSCI Asia Pacific Index (MXAP) climbed 1.8 percent to 117.03 as of 1:41 p.m. in Tokyo. The gauge fell 12 percent through yesterday from a February high amid concern growth in China and the U.S. is slowing as the euro-zone debt crisis escalates.
“It seems very significant,” said Jonathan Garner, Hong Kong-based chief strategist at Morgan Stanley, of the European leaders’ decision. “One of the key problems around Greece was the official lenders putting themselves in a senior position to existing bondholders, and that immediately impaired the Greek government debt. One of the worries the market’s had about the Spanish bank bailout is that the same thing would be repeated. So if that now doesn’t happen, that would be good news.” He spoke in a Bloomberg Television interview with Susan Li.
The Asian benchmark has climbed 2.5 percent in the first half of this year. That compares with a 5.7 percent advance by the Standard & Poor’s 500 Index and a 0.1 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12 times estimated earnings on average, compared with 12.8 times for the S&P 500 and 10.3 times for the Stoxx 600.
U.S. Futures
Futures on the Standard & Poor’s 500 Index surged 1.2 percent today. The gauge fell 0.2 percent in New York yesterday.
Hong Kong’s Hang Seng Index gained 1.9 percent and Japan’s Nikkei 225 added 1.4 percent. China’s Shanghai Composite Index climbed 0.9 percent, South Korea’s Kospi increased 1.3 percent and Australia’s S&P/ASX 200 rose 1.1 percent. Every major benchmark in the Asia-Pacific region advanced except for the Philippines Stock Exchange PSEi Index.
Talks among European leaders ended after 12 hours at 4:30 a.m. in Brussels today. German Chancellor Angela Merkel left the summit, which continues later today, without addressing specifics of the agreements. She said there were decisions on “future measures within the framework of our methods that we will have through” Europe’s two rescue funds.“I think we will have a successful conclusion.”
Doubts Cast
“Europe keeps making bold statements, then diluting them shortly afterwards,” Mark Matthews, head of research Asia for Bank Julius Baer & Co., which manages $281 billion in client assets worldwide, said in an e-mail interview in Singapore. “These are only vague encouraging words, which have produced excitement and euphoria. They will almost certainly be followed by denials and delays, and confusion in the marketplace as it comes to grips with the fact that it has been fooled again.”
Financial shares accounted for the largest gains on the Asian regional benchmark. Westpac advanced 1.4 percent to A$21.11. Australia & New Zealand Banking Group Ltd. climbed 2.1 percent to A$21.96.
Nomura Holdings Inc. (8604) surged 4.6 percent to 296 yen in Tokyo. Japan’s largest brokerage plans to hold a press conference today to discuss the results of an internal investigation into information leaks, said two people with knowledge of the situation.
Exporters climbed. Toyota Motor gained 2.4 percent to 3,185 yen. Hutchison Whampoa Ltd. (13), a port operator that gets about half its sales in the Europe, rose 2.7 percent to HK$66.75.
BHP Billiton rose 2.6 percent to A$31.52. Rio Tinto Group advanced 2.3 percent to A$56.45. Copper for delivery in three months advanced 1.5 percent on the London Metal Exchange.
To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
