Asian stocks advanced this week as earnings and investments by US companies bolstered confidence higher interest rates won't slow corporate spending. Furukawa Electric Co and Samsung Electronics Co led gains.
\n"US corporate earnings have been very good, profits and sales have climbed and sooner or later companies will once again start investing in technology," said Nicolo Foscari, a fund manager at Credit Suisse Asset Management in Milan, which oversees about US$7.3 billion.
\nThe Morgan Stanley Capital International Asia-Pacific Index, which consists of more than 900 stocks, climbed for a second week in three, rising 3.2 percent to 91.61. The measure that tracks computer-related stocks was the biggest gainer among 10 industry groups within the MSCI Asia-Pacific Index.
\nThe Hang Seng China Enterprises Index added 7.8 percent after China's central bank denied reports that it plans to raise interest rates and a top banking regulator told lenders to avoid cutting off all new lending. All 37 shares of Chinese companies, or H-shares, tracked by the index advanced, putting it ahead of 59 other global benchmarks compiled by Bloomberg data this week.
\nThe TAIEX had its biggest weekly surge since the five days ended April 2, climbing 4.2 percent. Shares rose after MSCI said it will give full weight to the nation's stocks in its global indexes. The move may prompt investors tracking MSCI benchmarks to buy about US$4 billion of the nation's equities.
\nThe TAIEX, along with benchmarks in Japan, Hong Kong and Indonesia, gained for a second week in three. The Philippine Stock Exchange Composite Index added 3.1 percent, its biggest weekly jump since the period ended April 23, after President Gloria Arroyo won the country's election.
\nFurukawa Electric, the world's second-largest maker of optical fiber, added 13 percent this week. Samsung Electronics, the world's No. 3 cellphone maker, surged 11 percent, completing its first weekly gain in four.
\nEarnings at Standard & Poor's 500 companies are forecast to grow 18.6 percent for this year, up from 14.9 percent at the end of March, according to Thomson Financial. Spending by phone companies such as SBC Communications Inc and Sprint Corp also helped ease concerns that higher borrowing costs will stall spending in the US, the biggest destination for Asian exports.
\n"Gains in US technology shares helped confidence that Taiwan's electronics firms are likely to do well in the second half," said Maggie Chien, a fund manager at Capital Investment Management Co, which manages the equivalent of US$30 million.
\nTaiwan Semiconductor Manufacturing Co (台積電), which relied on the US for 74 percent of its sales in the first quarter, and United Microelectronics Corp (聯電), the world's No. 2 supplier of made-to-order computer chips, advanced for the first week in four.
\nJiangxi Copper Co, China's biggest copper producer, jumped 18 percent. Zhejiang Expressway Co, the country's second-largest publicly traded toll-road operator, surged 16 percent.
\nBanks should keep lending to projects that aren't banned by the government, China Banking Regulatory Commission chairman Liu Mingkang (
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
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