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Wednesday, 28 November 2012
Asian Stocks Rise on U.S. Budget Remarks, Japan Stimulus
By Adam Haigh - Nov 29, 2012 6:25 AM GMT+0400
Asian stocks rose as U.S. lawmakers said they’re optimistic for an agreement to avoid automatic spending cuts and tax increases and as the leader of Japan’s opposition party called for unlimited monetary policy easing.
Toyota Motor Corp. Asia’s biggest carmaker, gained 0.7 percent. Sky Network Television Ltd., New Zealand’s largest pay TV operator, jumped the most in more than a year in Wellington after the company announced payment of a special dividend. Starpharma Holdings Ltd. (SPL)tumbled 31 percent in Sydney as the biotechnology company said it won’t file a drug application in the U.S. following a disappointing clinical trial for a new treatment.
U.S. President Barack Obama, center, speaks during a cabinet meeting while Hillary Clinton, secretary of state, left and Leon Panetta, secretary of defense, listen at the White House in Washington, D.C., U.S., on Wednesday, Nov. 28, 2012. Photographer: T.J. Kirkpatrick/Bloomberg
The MSCI Asia Pacific (MXAP) Index gained 0.5 percent to 123.72 as of 11:21 a.m. in Tokyo. The gauge rose 13 percent through yesterday from this year’s low on June 4 as central banks added stimulus to spur growth and data showed a slowdown in China may be ending.
“Market expectations are that the U.S. cutbacks will be watered down and spread over several years,” said Matthew Sherwood, Perpetual Investment’s head of markets research in Sydney. Perpetual manages about $25 billion. “If the cliff is successfully flattened out over several years, the U.S. recession feared by markets is unlikely to occur.”
Japan’s Nikkei 225 Stock Average (NKY) gained 0.7 percent, with trading volume 18 percent below its 30-day average for the time of day, according to data compiled by Bloomberg. The broader Topix Index rose 0.8 percent. The Topix may surge 19 percent in 2013 on compelling valuations and earnings, Goldman Sachs Group Inc. strategist Kathy Matsui wrote in a report today.
There’s “scope for additional monetary easing ahead,” Matsui wrote. Next year “will provide a more favorable backdrop for Japanese equities than the multiple headwinds of 2012.”
Japan’s main opposition Liberal Democratic Party leader Shinzo Abe wants unlimited easing of monetary policy from the Bank of Japan until inflation reached 2 percent, he said in Tokyo today. The Topix advanced 6.8 percent through yesterday from Nov. 14, when Prime MinisterYoshihiko Noda called for a Dec. 16 election, causing the yen to drop on speculation the opposition LDP may win and call for more monetary easing by the Bank of Japan.
Hong Kong’s Hang Seng Index rose 0.5 percent and the Shanghai Composite Index was little changed. South Korea’s Kospi Index (KOSPI) advanced 0.9 percent, Singapore’s Straits Times Index rose 0.6 percent and Taiwan’s Taiex gained 0.9 percent.
Australia’s S&P/ASX 200 Index gained 0.5 percent as a report showed Australian sales of newly built homes rose for the first time in four months in October indicating the central bank’s interest-rate reductions are luring buyers.
Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. The S&P 500 rose 0.8 percent yesterday, reversing earlier declines, as Republican House Speaker John Boehner said he is optimistic that budget talks can avert more than $600 billion in automatic tax increases and spending cuts next year.
Carmakers accounted for the largest gains on the MSCI Asia Pacific Index. Toyota Motor gained 0.7 percent to 3,500 yen. Kia Motors Corp. (000270) advanced 4.6 percent to 61,900 won and Hyundai Motor Co. climbed 2.9 percent to 231,000 won in Seoul on expectations sales in the so-called BRIC countries of Brazil, Russia, India and China, will increase.
Sky Network Television advanced 3 percent to NZ$5.22, heading for the largest gain since October 2011. Sky will make a 32 New Zealand cents-a-share distribution next month, the Auckland-based company said in a statement.
Luk Fook Holdings Ltd. (590) soared 5.2 percent to HK$22.10 after profit at the jeweler topped estimates. Rival Chow Tai Fook Jewellery Group Ltd. advanced 3.7 percent to HK$10.68.
Aristocrat Leisure Ltd. gained 4.5 percent to A$3.18, heading for its biggest three-day rally in nine months. Credit Suisse Group AG (ALL) upgraded its recommendation on shares of the gaming machine maker after the company yesterday reported full- year profit that topped forecasts.
Starpharma slumped 31 percent to A$1.11, a record slide, after a late-stage trial found the biotechnology company’s VivaGel product failed to cure women of a vaginal infection. Starpharma won’t be seeking U.S. approval now for VivaGel as a treatment.