BLBG:Asian Stocks Gain on China Bank Lending, Second Day of Retreat for Crude
Asian stocks climbed as oil headed for a second day of decline, easing concern that high prices might crimp global demand, and as Chinese banks rose after a report they are allowed to keep lending to local governments.
Hynix Semiconductor Inc. (000660), a South Korean chipmaker, gained 7.2 percent, the biggest gain in the MSCI Asia Pacific Index (MXAP), as Japan’s Elpida Memory Inc. (6665) filed for bankruptcy. Cathay Pacific Airways Ltd., Hong Kong’s biggest carrier, rose 3.4 percent as oil slid further from a nine-month high. China Construction Bank Co. climbed 1.1 percent in Hong Kong. Japanese exporters fell as gains in the yen cut their earnings outlook.
The MSCI Asia Pacific Index climbed 0.6 percent, to 128.1 as of 2:53 p.m. in Tokyo, with about two stocks rising for each that fell. The measure, which last retreated for two consecutive days on Jan. 5 and Jan. 6, erased a decline of as much as 0.3 percent. It is within 1 percent of completing a 20 percent advance from its October low.
“Investors’ desire to buy stocks is quite strong at the moment, so when stocks fall a little, people are rushing to buy them,” said Hideyuki Suzuki, general manager of investment market research department, SBI Securities Co. “Hong Kong and India are rising strongly so that’s also improving the investors’ sentiment.”
The Asia-Pacific gauge last week completed a 10-week winning streak, the longest such run of gains since its inception in 1988, amid signs of U.S. economic recovery and China’s monetary easing.
Japan Small Caps
Japan’s Nikkei 225 Stock Average (NKY) rose 0.8 percent after slipping 1.1 percent. The yen appreciated to as high as 80.02 against the dollar. Against the euro, Japan’s currency strengthened to 107.19 from 109.13. A stronger yen cuts overseas income at Japanese companies when repatriated. Honda Motor Co. (7267), a carmaker that gets more than 80 percent of its revenue overseas, lost 2.4 percent in Tokyo.
A gauge of smaller companies on the Tokyo bourse’s second section fell 0.2 percent, set to end its 30-day, longest stretch of gains since 1961.
South Korea’s Kospi (KOSPI) Index rose 0.7 percent, led by chipmaking rivals of Elpida. Australia’s S&P/ASX 200 Index fell 0.1 percent, erasing earlier gains.
The MSCI Asia Pacific Index gained 12 percent this year through yesterday, compared with an 8.8 percent advance by the S&P 500 and a 7.9 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.8 times estimated earnings on average, compared with 13.1 times for the S&P 500 and 11 times for the Stoxx 600.
Futures on the Standard & Poor’s 500 Index (SPXL1) rose 0.2 percent today. The index rose 0.1 percent in New York yesterday on better-than-estimated housing data and as financial shares rallied.
Elpida Going Under
Elpida filed for Japan’s biggest bankruptcy in two years yesterday after semiconductor prices plunged and it failed to win a second government bailout.
Hynix jumped 7.2 percent to 29,950 won in Seoul. Samsung Electronics Co., South Korea’s No. 1 consumer electronics exporter, rose 1.4 percent to 1.187 million won.
Hong Kong’s Hang Seng Index (HSI) climbed 1.1 percent and the Shanghai Composite Index slipped 0.2 percent. The China Banking Regulatory Commission has allowed banks to continue lending to local government financing vehicles for land reserves and road construction, China Securities Journal reports today, citing a meeting.
China Construction Bank, the world’s No. 2 lender by market value, rose 1.1 percent to HK$6.45. Industrial & Commercial Bank of China Ltd., the biggest, added 2.2 percent to HK$5.64.
Crude Retreats
Oil dropped for a second day in New York as investors bet that rising U.S. stockpiles signal easing fuel demand amid prices near the highest level in nine months. Oil for April delivery fell as much as 72 cents to $107.84 a barrel in electronic trading on the New York Mercantile Exchange and was at $107.89 at 2:22 p.m. Sydney time. The contract yesterday slid 1.1 percent to $108.56, snapping the longest winning streak since January 2010.
Cathay Pacific rose 3.4 percent. Reliance Industries Ltd., an Indian company that gets more than 90 percent of revenue from oil refining and petrochemical products, added 1.6 percent to 794.3 rupees in Mumbai. Tata Motors Ltd., the largest truckmaker and owner of Jaguar Land Rover, increased 2.4 percent.
Gains were limited as a committee of banks and investors that governs credit-default swaps was asked to rule whether Greece’s parliament triggered payouts on contracts that protect against losses on the country’s debt.
To contact the reporters on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net; Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
