Asian stocks rise as Mitsubishi, Nissan gain
Asian stocks rose for a third day after Mitsubishi UFJ Financial Group Inc. returned to profit, manufacturing in China expanded and Goldman Sachs Group Inc. lifted its rating for South Korean equities.
Mitsubishi UFJ gained 5.3 percent after Japan’s biggest bank by market value reported its first profit in nine months, and Mizuho Financial Group Inc. climbed 4.7 percent after Morgan Stanley boosted its rating. Nissan Motor Co., Japan’s No. 3 automaker, climbed 5.7 percent in Tokyo, leading automakers higher, after displaying its first electric car. South Korea’s Kospi Index climbed to the highest level in almost a year.
“Earnings have been quite good,” said Marco Wong, the Singapore-based chief investment officer for Asia excluding Japan at SG Asset Management, which has $351.6 billion in assets globally. “Potential earnings upgrades by analysts may provide a further leg up for the market.”
The MSCI Asia Pacific Index rose 0.8 percent to 112.82 as of 1:32 p.m. in Tokyo. The gauge has gained 15 percent over the past three weeks as better-than-expected results from U.S. and Asian companies led to improved investor confidence.
Japan’s Nikkei 225 Stock Average fell 0.3 percent to 10,328.32, and the broader Topix index climbed 0.5 percent. Most Asian benchmarks gained. In China, the Shanghai Composite Index advanced as much as 1.1 percent after reports by the Federation of Logistics & Purchasing and CLSA Asia Pacific Markets showed manufacturing continued to expand last month.
South Korea, U.S.
South Korea’s Kospi Index climbed 0.6 percent to 1,566.79, on course for its highest close since last Aug. 18, after the country’s stocks were raised to “market weight” from “underweight” at Goldman, which said company earnings appear more “resilient” than the brokerage had expected. Hyundai Motor Co., the country’s largest carmaker, climbed 3.8 percent.
Futures on the Standard & Poor’s 500 Index gained less than 0.1 percent, reversing a decline. The gauge rose 0.1 percent on July 31 as better-than-estimated gross domestic product spurred speculation the economy is recovering from the recession.
Toyota Motor Corp. added 2.3 percent to 4,080 yen and was the biggest single contributor to gains in the MSCI Asia Pacific Index. The world’s biggest carmaker expects auto sales in Japan to rise this month, the Tokyo Shimbun newspaper said, citing an interview with a Toyota managing director.
NOK Corp. rose 12 percent to 1,299 yen, on course for the highest level in more than 10 months, after the Japanese maker of auto and electronics parts narrowed its forecast for a loss as the effects of cost cuts exceeded expectations.
Valuations, Earnings
The MSCI Asia Pacific has surged about 60 percent since it sank to the lowest in more than five years on March 9, outpacing gains of 46 percent by the S&P 500. Accelerating growth in China, rising industrial production in Japan and a rally in commodities prices have helped bolster equities. Stocks in the MSCI Asia Pacific are currently valued at 24.4 times estimated earnings, compared with 18 times at the start of the year.
Eighty-two companies in the MSCI Asia Pacific Index reported earnings on July 31, the busiest day of the season, according to data compiled by Bloomberg.
Mitsubishi UFJ gained 5.3 percent to 596 yen. The bank posted a 48 percent jump in net income for the three months to June 30, the first profit after two quarterly losses, because of rising lending income and a gain in stockholdings.
“Banks’ earnings are solid, given they set aside substantial reserves for bad loans,” said Tomochika Kitaoka, a senior strategist at Mizuho Securities Co. in Tokyo.
Aozora Bank Ltd., the Japanese lender controlled by Cerberus Capital Management LP, climbed 4.6 percent to 137 yen after profit in the latest quarter rose 86 percent. Mizuho Financial, Japan’s third-largest bank by market value, gained 4.7 percent to 225 yen after Morgan Stanley increased its investment rating to “overweight” from “underweight.”
Exporters
Exporters in Hong Kong climbed after the U.S. reported that gross domestic product shrank at a smaller-than-expected 1 percent annual pace in the second quarter after contracting 6.4 percent in the first quarter. Li & Fung Ltd., the biggest supplier of clothes and toys to Wal-Mart Stores Inc. and Target Corp., added 2.2 percent to HK$23.35. Yu Yuen Industrial Holdings Ltd. advanced 6.7 percent to HK$22.45.
Nissan Motor advanced 5.7 percent to 728 yen. The company displayed its first electric car yesterday and Chief Executive Officer Carlos Ghosn said electric cars may account for at least 10 percent of global vehicle sales by 2020.
Hyundai Motor climbed 3.8 percent to 91,400 won in Seoul on speculation the U.S. Senate will back a $2 billion infusion for the government’s “cash for clunkers” program that is aimed at giving U.S. consumers as much as $4,500 for the purchase of a new car when they scrap an older vehicle.
Fuji Heavy Industries Ltd. gained 7.6 percent to 411 yen after saying U.S. sales of its Subaru-brand cars in the U.S. gained about 30 percent last month.
Shinko Electric Industries Co. jumped 13 percent to 1,680, adding to its 15 percent surge on July 31. The maker of semiconductor packages on July 30 reversed its full-year forecast to a net income from a net loss.
Source: Bloomberg