Japanese, Australian stock futures up

Japanese and Australian stock futures gained as U.S. oil inventories unexpectedly declined, sparking a rally in crude prices.

U.S.-traded receipts of BHP Billiton Ltd., Australia’s largest oil producer, gained 1.2 percent from the closing share price in Sydney yesterday as crude surged the most this month. Mitsubishi Corp., which generates almost half its sales from commodities, added 1 percent from Tokyo’s close. Honda Motor Co., Japan’s second-largest automaker, rose 2.1 percent as three brokerages recommended buying shares of Japanese automakers.

Futures on Japan’s Nikkei 225 Stock Average expiring in September finished at 10,265 in Chicago, up from 10,210 in Osaka and 10,185 in Singapore. Those for Australia’s S&P/ASX 200 Index climbed 1.1 percent in Sydney today. New Zealand’s NZX 50 Index added 0.2 percent in Wellington.

In New York, the Standard & Poor’s 500 Index rose 0.7 percent yesterday, rebounding from a 0.9 percent loss sparked by concern China’s economy may be faltering as the country’s benchmark equity gauge briefly entered a so-called bear market.

“Despite what’s happening in China, we’ve yet to see a change to global liquidity flows,” said Mitsushige Akino, who oversees $624 million in assets at Ichiyoshi Investment Management Co. “Gains in the U.S. in the face of China’s ongoing correction are easing investors’ nerves.”

Advances for Japan’s futures were limited as the yen climbed to as much as 93.67 versus the dollar, the strongest level since July 23. A stronger yen reduces the value of sales generated overseas in local-currency terms.

Oil Stockpiles

The MSCI Asia Pacific Index rally since March has lifted the average valuation of shares in the gauge to 24 times estimated earnings, compared with 17 times for the S&P 500 and 14 times for the Dow Jones Stoxx 600 Index in Europe.

U.S. oil stockpiles dropped 8.4 million barrels last week, the most since the week ended May 23, 2008, the Energy Department report showed yesterday. Crude oil for September delivery rallied 4.7 percent to $72.42 a barrel in New York.

Citigroup Inc. analyst Noriyuki Matsushima boosted his recommendation on Hino Motors Ltd., Japan’s biggest maker of heavy-duty trucks, and Isuzu Motors Ltd., Japan’s third-biggest maker of commercial vehicles, to “hold” from “sell.”

Daiwa Securities Group Inc.’s Shingo Hayashi assigned “outperform” ratings to both companies in new coverage. Andrew Philips at KBC Groep NV lifted Mazda Motor Corp. to “positive” from “neutral” on the view that the shares are cheap compared with book value and that the yen is likely to weaken.

Source: Bloomberg