07 May 2009
May 7 (Bloomberg) -- Asian stocks jumped on better-than- estimated U.S. and Australian jobs reports and an assurance from U.S. Treasury Secretary Timothy Geithner that none of the country's biggest banks are insolvent.Honda Motor Co., which gets 45 percent of its sales in North America, climbed 5.4 percent in Tokyo, where markets reopened after a three-day holiday. Mitsubishi UFJ Financial Group Inc., Japan's largest listed lender, surged 12 percent after Geithner said results of bank stress tests will reassure investors. BHP Billiton Ltd., the world's largest mining company, gained 4.8 percent as oil and copper prices surged.
"A lot of people that doubted the rally are becoming more positive on it," said Scott Tully, a Sydney-based portfolio manager at Colonial First State Global Asset Management, which holds about $100 billion. "Does that make it sustainable? I don't know. But it does mean people are becoming a bit less shell-shocked, even though they are still fairly fragile."
The MSCI Asia Pacific Index gained 2.3 percent to 96.49 as of 12:58 p.m. in Tokyo. The gauge has rallied 38 percent from a five-year low on March 9 on speculation the worst of the global financial crisis had passed, taking valuations to the highest since March 2004.
The Nikkei 225 Stock Average climbed 3.6 percent to 9,296.34 today after a holiday in which the Asian MSCI index that excludes Japan gained 6.6 percent. Australia's S&P/ASX 200 Index added 1.6 percent as a statistics bureau report said employers unexpectedly added workers in April, buoying optimism the economy will avoid the worst of the global recession. All Asian markets rose.
Economic Recovery?
Sompo Japan Insurance Inc. surged 15 percent in Tokyo trading after JPMorgan Chase & Co. raised its recommendation. Korea Exchange Bank rose 13 percent on speculation of a takeover bid. CSK Holdings Corp. plunged 8.6 percent in Tokyo as the computer-services company reported a wider-than-expected loss.
Futures on the U.S. Standard & Poor's 500 Index lost 0.5 percent. The gauge climbed 1.7 percent yesterday as investors speculated banks will need less capital than expected and ADP Employer Services said companies eliminated fewer jobs in April than the average economist estimate in a Bloomberg survey.
The yen fell against the dollar and the euro as demand for Japan's currency as a refuge from the global financial crisis dropped. The yen weakened to 98.68 per dollar from 98.31 yesterday in New York. The currency fell to 131.31 per euro from 131.10 yesterday.
The results of the stress tests will be "reassuring," Geithner said in an interview that's scheduled to air on PBS. While some banks will need to raise more capital, there are a number of ways they can do that and most should be able to do it in the private sector, he said.
‘More Confident'
Government reports last week showed consumer spending in the U.S. grew at the fastest pace in two years during the first quarter while Japanese industrial output posted its first advance in six months in March. A Chinese purchasing managers' index from CLSA Pacific Markets released on May 4 showed manufacturing expanded for the first time in nine months.
Honda climbed 5.4 percent to 3,010 yen. Toyota Motor Corp., the world's largest automaker, gained 2.3 percent to 3,990 yen. Canon Inc., the world's largest camera maker, jumped 7 percent to 3,350 yen.
"As various indicators improve, market players are getting more and more confident the global economy is bottoming out," said Mitsushige Akino, who oversees about $615 million at Ichiyoshi Investment Management Co. in Tokyo. "Investors are more confident the U.S. financial crisis will come to an end after the stress tests and subsequent capital injections."
Banks Advance
Finance companies accounted for 35 percent of the MSCI Asia Pacific Index's advance today. The shares are the worst performing of 10 industry groups in the past year as losses from the credit crisis swelled to more than $1.3 trillion.
Mitsubishi UFJ advanced 12 percent to 599 yen. HSBC Holdings Plc, Europe's biggest bank, gained 3.2 percent to HK$63.55. Australia & New Zealand Banking Group Ltd., the nation's fourth-largest lender, gained 2 percent to A$16.50. Westpac Banking Corp., the biggest by market value, added 2.5 percent to A$20.45.
BHP Billiton rose 4.8 percent to A$35.53 after crude oil climbed 4.6 percent to $56.34 a barrel in New York yesterday, the highest settlement since Nov. 14, and copper futures jumped 5 percent, the biggest gain since April 3. Rio Tinto Group, the world's No. 3 mining company, gained 3.7 percent to A$71.63.
Brokerage Upgrade
Sims Metal Management Ltd., the world's biggest recycler of scrap metal, surged 7.5 percent to A$22.55 in Sydney after saying it may return to profitability this quarter.
Sompo surged 15 percent to 664 yen after Natsumu Tsujino, an analyst at JPMorgan upgraded the stock to "overweight" from "neutral." Korea Exchange Bank, controlled by U.S. buyout firm Lone Star Funds, rose 13 percent to 8,580 won in Seoul after Edaily reported Korea Development Bank is interested in taking over the lender.
CSK Holdings plunged 8.6 percent to 479 yen, after reporting a wider-than-expected loss in the year ended in March, for which it blamed inventory, tax and asset-sale charges.
