22 Jan 2009
Jan. 22 (Bloomberg) -- Asian stocks rose, led by financial and drug companies, on signs the U.S., Japan and China are stepping up efforts to ease the global financial crisis.HSBC Holdings Plc, which gets a fifth of its revenue from North America, rose 5.3 percent in Hong Kong after U.S. Treasury Secretary-elect Timothy Geithner pledged "dramatic" action to revive growth. North China Pharmaceutical Co. added 4.4 percent on government plans to increase healthcare spending. Mizuho Financial Group Inc. rose 1.4 percent after the Bank of Japan said it may buy corporate bonds to prevent a credit shortage.
"It's a lottery these days," said Troy Angus, who helps manage about $3 billion at Paradice Investment Management in Sydney. "Government stimulus is certainly a benefit to the economy and equity markets but there are still significant issues to overcome. The data coming out is uniformly negative."
Two stocks rose for each one that fell on the MSCI Asia Pacific Index, which was little changed at 82.79 at 3:34 p.m. in Tokyo, as a climb in the yen lowered the value of Japanese shares on the dollar-denominated gauge. The measure dropped 7.6 percent in 2009 on signs the economic turmoil is hurting profits.
Japan's Nikkei 225 Stock Average gained 1.9 percent, while Hong Kong's Hang Seng Index added 2.1 percent. All markets in the region rose except Pakistan.
Sony Corp. forecast its first annual loss in 14 years after markets closed today. Hitachi High-Technologies Corp., a Japanese electronics trader, plunged 7.8 percent after cutting its profit forecast. Newcrest Mining Ltd., Australia's largest gold mining company, lost 3.5 percent on higher production costs.
‘More Substantial Action'
MSCI's Asian gauge plunged by a record 43 percent last year as the world's biggest economies slipped into recession. Government reports today showed Japan's exports tumbled in by a record in December, China's economy expanded at the slowest pace in seven years last quarter, while South Korea's shrank.
Futures on the Standard & Poor's 500 Index added 0.7 percent, while those on the Nasdaq Composite Index rose 1.5 percent as profit from Apple Inc. beat analysts estimates.
Financial shares led the S&P 500's 4.4 percent climb yesterday, as people familiar with the situation said Obama's economic team was pushing to complete a bank-rescue plan.
In testimony to lawmakers yesterday, Geithner pledged an expanded and prolonged role for President Barack Obama's government in everything from stabilizing banks to ensuring credit for small businesses.
Government Response
An index of financial stocks on MSCI's Asian gauge added 1.7 percent. The measure, which tracks banks, insurers and real- estate developers, is the worst performer of the MSCI index's 10 industry groups this year as credit-market concerns increased.
"An improvement in the U.S. banking system would have a global influence," said Jason Teh, who helps manage $3.5 billion at Investors Mutual Ltd. in Sydney. "The cost of banks lending to each other would begin to come down and that would help revive spending."
HSBC climbed 5.3 percent to HK$57.90 in Hong Kong, while Mitsubishi UFJ Financial Group Inc., Japan's biggest lender, added 0.8 percent to 487 yen.
Policy makers at the Bank of Japan today kept the key overnight lending rate unchanged at 0.1 percent by a unanimous vote. Governor Masaaki Shirakawa and his colleagues may buy corporate bonds with a maturity of up to one year, the bank said in a statement released today in Tokyo.
National Australia Bank Ltd., the nation's largest by assets, gained 2.8 percent to A$18.11. Lindsay Tanner, the country's finance minister, said the government may establish a fund to lend directly to companies should overseas banks fail to roll over up to A$75 billion ($49.5 billion) in loans.
North China Pharmaceutical Co. surged 3.9 percent to 7.73 yuan in Shanghai, while Harbin Pharmaceutical Group Co. rose 4 percent to 12.05 yuan. China's central and local governments will invest in healthcare spending over three years, according to a statement on the central government's Web site.
Record Decline
China Petroleum & Chemical Corp., the nation's second- biggest oil producer, jumped 4 percent to HK$4.38 in Hong Kong after saying it boosted crude-oil processing by 4.5 percent last year on higher domestic demand.
Toyota Motor Corp. slid 4.2 percent to 2,855 yen. Mazda Motor Corp., which exports 80 percent of domestic production, slumped 4 percent to 146 yen after KBC Securities cut the stock to "negative" from "neutral."
Japan's December exports slumped 35 percent, was the sharpest decline since 1980, the earliest year for which there is comparable data, according to government figures. The December drop eclipsed the 26.7 percent decline from the previous month.
Exporters also fell as the stronger yen reduced the value of overseas sales. The Japanese currency rose against the dollar to as high as 87.13 yesterday, the strongest level since July 1995, from 89.88 at the close of Tokyo stock trading yesterday.
Sony, Newcrest
Sony, the world's second-largest consumer-electronics maker, fell 2.6 percent to 1,938 yen. The company may close one of its two television factories in Japan, a spokesman said.
Hitachi High-Technologies plunged 7.8 percent to 1,278 yen after the company cut its full-year profit outlook by 59 percent as chipmakers and liquid-crystal-display panel makers docked spending.
Yokohama Rubber Co., which forecast a net loss for the year ending in March, sank 5.3 percent to 338 yen. Sumitomo Rubber Industries Ltd., Japan's No. 2 tiremaker by value and a rival of Yokohama Rubber, slumped 4.6 percent to 581 yen.
Newcrest lost 3.5 percent to A$31.90 after saying second- quarter mining costs jumped 82 percent as a drop in bullion production and a slump in the price of copper trimmed margins.
