Asian Stocks Climb From $1.1 Trillion Slump on U.S. Data

Asian Stocks Climb From $1.1 Trillion Slump on U.S. Data

(Bloomberg)Asian stocks climbed, after the regional benchmark index yesterday erased this year’s gain, as U.S. economic data beat estimates and on concern eased that the Federal Reserve will reduce record stimulus.

Japan’s Nikkei 225 Stock Average and the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose after entering a bear market yesterday. Kawasaki Heavy Industries Ltd. (7012) rose 3.3 percent in Tokyo after removing its president and ending merger talks with Mitsui Engineering & Shipbuilding Co. (7003) Australian banks paced gains in financial shares.

The MSCI Asia Pacific Index rose 1.2 percent to 130.69 as of 12:52 p.m. in Tokyo, heading for a 0.2 percent gain this week. The gauge yesterday closed at the lowest since Dec. 27 after dropping more than 10 percent from a May 20 high, meeting some traders’ definition of a correction, and erasing $1.06 trillion in value.

“You get good data plus reduced fear about a premature rate hike from the U.S. Federal Reserve, and that helped the U.S. share market and that’s helping Japanese and Asian markets today,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has $126 billion under management. “Look at the underlying global growth dynamics and they remain favorable.”

Relative Value

The Asia-Pacific measure traded at 12.5 times estimated earnings as of yesterday, compared with 14.8 times for the Standard & Poor’s 500 Index (SPX) and 12.9 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg. The MSCI Asia Pacific excluding Japan lost more than 10 percent through yesterday from this year’s high on May 9 on concern a pickup in the U.S. economy may prompt the Fed to taper stimulus. The gauge rose 1.3 percent today.

All 10 industry groups on the MSCI Asia Pacific Index advanced, led by consumer and utility shares, and about four shares gained for each that fell. Financial stocks contributed the most to today’s rally as Australian lenders gained.

National Australia Bank Ltd., the nation’s fourth-biggest lender by market value, rose 3.3 percent to A$29.285. Westpac Banking Corp., the No. 2, advanced 2 percent to A$28.75.

U.S. Data

Futures on the S&P 500 lost 0.2 percent after the gauge added 1.5 percent yesterday, the biggest gain since January, when reports showed retail sales climbed the most in three months and the number jobless claims dropped by 12,000 last week. The Wall Street Journal reported that the Fed may “push back” on market expectations of higher interest rates.

Japan’s Topix index gained 1.9 percent and the Nikkei 225 added 2.6 percent. South Korea’s Kospi index added 0.3 percent on National Pension Service plans to allocate more funds to overseas equities as the country’s biggest investor seeks to boost returns.

Bear Market

The Hang Seng China Enterprises Index gained 0.4 percent after yesterday capping a 21 percent decline from this year’s high to enter a bear market. Hong Kong’s Hang Seng Index climbed 0.9 percent, while the Shanghai Composite Index was up 0.2 percent. Taiwan’s Taiex Index fell 0.3 percent. Singapore’s Straits Times Index gained 0.8 percent.

Australia’s S&P/ASX 200 rose 1.7 percent after entering a correction yesterday. New Zealand’s NZX 50 Index added 0.5 percent in Wellington.

Among stocks that fell, ASX Ltd. slumped 6.3 percent to A$33.08 in Sydney after the operator of Australia’s main stock exchange completed the first part of A$553 million ($530 million) in capital raising.