Wednesday, 26 September 2012

Asian Stocks Rise on China Stimulus Measures Prospects

By Adam Haigh - Sep 27, 2012 7:01 AM GMT+0400

Asian stocks rose as a drop in Chinese industrial profits increased pressure on Premier Wen Jiabao to step up measures to support growth in the world’s second-largest economy.

China Overseas Land & Investment Ltd. (688), the country’s biggest developer by market value listed in Hong Kong, rose 1 percent. Komatsu Ltd., a maker of construction equipment that gets about 15 percent of its sales in China, gained 1.7 percent in Tokyo. Renesas Electronics Corp. (6723) advanced 1.3 percent after Kyodo reported a government-backed counter offer for the Japanese chipmaker may be double a bid by KKR & Co. Nitori Holdings Co. (9843) fell 8.5 percent in Tokyo after the furniture retailer reported profit that missed analyst estimates.
Most Asian Stocks Drop Amid Global Growth Concern, Spanish Riots A Renesas Electronics Corp. central processing unit (CPU) board. Photographer: Kiyoshi Ota/Bloomberg

The MSCI Asia Pacific Index gained 0.4 percent to 121.98 as of 11:59 a.m. in Tokyo, reversing an earlier 0.2 percent decline. The gauge climbed 3.7 percent this quarter through yesterday as central banks in Europe, the U.S., Japan and China took action to stimulate economic growth.

“The positive would be a big China stimulus package that could send markets higher,” said Andrew Pease, Sydney-based chief investment strategist at Russell Investment Group, which manages about $150 billion. “The signals are that they are not really itching to do that. There’s some evidence in the data that we’ll start to see stabilization in economic growth by the end of this year. The risk would be that the Chinese data continues to weaken into the end of the year and the first quarter of 2013.”


Industrial Profits

Hong Kong’s Hang Seng added 0.5 percent and China’s Shanghai Composite rose 0.2 percent as the National Bureau of Statistics said today in Beijing that Chinese industrial companies’ profits dropped for a fifth month in August. Today’s report may increase pressure on Wen Jiabao to step up easing measures as risks grow that annual expansion will be the weakest in 22 years.

Japan’s Nikkei 225 Stock Average and Australia’s S&P/ASX 200 Index were little changed. South Korea’s Kospi gained 0.2 percent. Singapore’s Straits Times rose 0.5 percent and Taiwan’s Taiex increased 0.2 percent.

Futures on the Standard & Poor’s 500 Index advanced 0.4 percent today. The U.S. gauge dropped 0.6 percent yesterday, for its longest retreat since July, amid concern that Europe’s debt crisis is worsening and global growth is slowing.

Stocks earlier declined as data from the U.S. to Italy added to concern that global economic growth is waning and Spanish borrowing costs soared amid violent protests against austerity measures.

The MSCI Asia Pacific (MXAP) Index climbed 6.8 percent this year through yesterday compared with a 14 percent gain on the S&P 500 Index and an 11 percent jump on the Stoxx Europe 600 Index. The Asian benchmark traded at 12.7 times estimated earnings compared with 13.9 for the S&P 500 and 12 for the Stoxx Europe 600.

To contact the reporter on this story: Adam Haigh in Sydney at
To contact the editor responsible for this story: John McCluskey at