25 Nov 2009
Nov. 25 (Bloomberg) -- Asian stocks rose to a one-week high and the Australian dollar and emerging market currencies gained on expectations for stronger economic growth in the region. European shares climbed.Mining companies led the MSCI Asia Pacific Index up 1 percent to 117.96, the highest since Nov. 18, at 4:28 p.m. in Hong Kong. The Dow Jones Euro Stoxx 600 Index added 0.8 percent and Standard & Poor's 500 Index futures rose 0.4 percent. Australia's dollar strengthened 0.9 percent to 92.74 U.S. cents after the central bank's deputy governor, Ric Battellino, said the economy was in a "new upswing." The U.S. dollar traded below $1.50 to the euro for the first time in more than a week and metals gained.
"There should be stronger growth in Asia than any other region next year," said Christian Jin, a fund manager at HI Asset Management Co. in Seoul, which oversees the equivalent of $7.8 billion. "Domestic demand is good and exports to developed economies are likely to improve."
Australia's economy will expand 2.9 percent next year as the world exits the first global recession since World War II, according to the median estimate of seven economists in a Bloomberg survey. Japan's exports dropped 23.2 percent from a year earlier in October following a 30.6 percent decline the previous month, the Finance Ministry said today in Tokyo. The decline was the smallest in a year and beat the median estimate of 18 economists for a 26.8 percent drop.
European Shares
The Stoxx 600 index of European shares gained 1.93 to 248.81, led by BHP Billiton Plc and Banco Santander SA.
Futures on the S&P 500 Index added 0.4 percent to 1,108.10. The U.S. stock gauge lost less than 0.1 percent yesterday to 1,105.65 as Federal Reserve officials said record-low interest rates might fuel "excessive" speculation in financial markets.
The Australian dollar strengthened against all 16 of its most-traded counterparts after Battellino said it's "reasonable to assume we will see this growth extended for a few more years yet," adding to speculation for higher interest rates.
Policy makers raised rates twice since Oct. 6 and there's a 76 percent chance the Reserve Bank will boost borrowing costs on Dec. 1, according to a Credit Suisse AG index based on swaps.
Benchmark rates are 3.5 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations' higher yields. The U.S. Dollar Index, which measures the currency against six of its main trading partners, fell for a third day, dropping 0.4 percent to 74.809.
Dong Devalued
The Malaysian ringgit advanced 0.4 percent, the biggest gain in two weeks, to 3.3772 per dollar and the Indonesian rupiah climbed 0.7 percent to 9,445. Vietnam's dong traded at 17,886 per dollar after the central bank devalued its currency and raised rates. The currency will be allowed to weaken by about 3 percent from that level.
The euro rose as much as 0.3 percent to $1.5007, erasing an earlier loss of 0.1 percent. The yen gained to as high as 88.20 versus the dollar, the strongest since Oct. 8., after the report on exports.
"Japan's trade data clearly indicates that overseas demand is recovering," said Tomohiro Nishida, a dealer in Tokyo at Chuo Mitsui Trust & Banking Co. "The bullish remarks from the RBA also added to the revival of risk demand."
Sterling advanced before the U.K.'s Office for National Statistics releases its second estimate of the country's third- quarter gross domestic product. GDP probably fell 0.3 percent from the second quarter, less than the 0.4 percent drop reported on Oct. 23, according to the median of 28 economists' forecasts in a Bloomberg News survey. The pound rose 0.8 percent to $1.6722 and 0.5 percent to 1.1133 euros.
Asia Leads
The Organization for Economic Cooperation and Development on Nov. 19 raised its forecast for growth in the leading developed economies next year to 1.9 percent from 0.7 percent previously and predicted a further acceleration in 2011 as China powers a global recovery.
Material stocks were the biggest contributors to the MSCI Asia Pacific Index's advance. BHP Billiton, the world's largest mining company, rose 2.4 percent to A$41.19. James Hardie Industries NV, the top seller of home siding in the U.S., rose 2.6 percent to A$7.99.
Industrial metals advanced, with copper traded on the London Metal Exchange rising to $6,960 a ton.
Financial shares fell in Japan, limiting the Topix Index's gain to 0.5 percent, after yesterday's bankruptcy filing by Anabuki Construction Inc. Anabuki, with 140 billion yen ($1.6 billion) of debt, renewed concerns about the need for new capital.
Aozora, Mitsui
Aozora Bank Ltd., which said yesterday it is owed 12.7 billion yen by Anabuki, sank 2.2 percent to 91 yen. The effect of the bankruptcy will be "slight" and won't alter its full- year forecast, Aozora said.
Mitsui Fudosan Co., Japan's largest property developer, fell 2.8 percent to 1,382 yen in Tokyo. Sumitomo Realty & Development Co., Japan's No. 3 builder, dropped 2.2 percent to 1,409 yen.
Anabuki, based in Takamatsu in western Japan, said its condominium business had struggled in the recession and tighter credit markets since last year. Condominium sales in Tokyo fell 20.1 percent in October.
Chinese banks dropped in Hong Kong as Goldman Sachs Group Inc. said potential capital raising efforts could be an "overhang" on the industry. Bank of China Ltd., the nation's third-largest lender, lost 3.3 percent to HK$4.47. Industrial & Commercial Bank of China Ltd., the world's third-largest company by market value, dropped 1 percent to HK$6.78.
U.S. Losses
U.S. stock losses yesterday were limited as the Conference Board's consumer-confidence index rose in November and the S&P/Case-Shiller home-price index rose for a fourth month. A government report showed personal spending increased less than economists' estimates last quarter.
Treasuries declined after rising the most in a week yesterday as a sale of $42 billion of five-year debt drew the strongest demand in more than two years and the Fed reiterated that interest rates would remain near zero for an extended period. The yield on the 3.375 percent note due November, 2019, climbed 2 basis points to 3.33 percent.
The government will auction a record $32 billion of seven- year notes today following yesterday's offering and a $44 billion sale of two-year securities on Nov. 23.
Gold for immediate delivery jumped 0.9 percent to a record $1,180.20 an ounce as the dollar dropped. The Financial Chronicle newspaper reported that India may buy more bullion for its central bank reserves. Reserve Bank of India Governor Duvvuri Subbarao declined to comment.
‘Buying Interest'
"There certainly is very strong buying interest," said Toby Hassall, a commodity analyst with CWA Global Markets Pty Ltd. in Sydney. "Investors are thinking of more long-term trends in the U.S. dollar, taking advantage of any short-term weakness to increase their exposure to gold."
Oil rose 0.6 percent to $76.51 a barrel. Prices dropped to a five-week low in New York yesterday after the American Petroleum Institute reported that U.S. crude stockpiles increased 3.35 million barrels to 336.4 million last week.
"Demand growth isn't that strong, especially in the U.S. and we do have high inventories, so I think in the short term we could see high volatility," said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp in Tokyo.
The U.S. Energy Department will probably report today that crude supplies climbed by 1.5 million barrels last week, according to a Bloomberg News survey.
