Asian stocks rose, led by financial companies and automakers, after G20 finance ministers vowed to combat the global recession and OPEC refrained from cutting output quotas to bolster economic growth.
Mitsubishi UFJ Financial Group Ltd, Japan’s biggest publicly traded bank, rose 6 percent as corporate bond risk fell following a pledge by G20 officials for coordinated action to clean up banks’ toxic assets. Mazda Motor Corp, Japan’s No. 4 carmaker, jumped 9.8 percent on optimism that production will rebound.
“People in the market have calmed down and started noticing authorities worldwide are doing what they can to revive the global economy and restore the financial system,” said Kiyoshi Ishigane, a strategist at Tokyo-based Mitsubishi UFJ Asset Management Co, which oversees about US$61 billion.
The MSCI Asia Pacific Index rose 1.4 percent to 75.77 as of 1:47pm in Tokyo, with about three stocks gaining for each one that declined. Japan’s Nikkei 225 Stock Average climbed 2 percent to 7,722.41, while Hong Kong’s Hang Seng Index gained 1 percent.
Markets in Asia rose except in South Korea, China, Singapore, Indonesia, Malaysia, Thailand and the Philippines.
Foxconn International Holdings Ltd (富士康), the world’s biggest contract maker of mobile phones, gained 7.7 percent in Hong Kong following a brokerage upgrade.
Futures on the Standard & Poor’s 500 Index fell 0.9 percent. The benchmark gauge rose 0.8 percent on Friday, capping an 11 percent rally for the week, as takeover speculation lifted health care companies.
The MSCI Asia Pacific Index rose 3.9 percent last week, its best performance this year. The gauge is down 16 percent this year, extending last year’s record 43 percent drop as the global recession decimated profits at companies from Mazda to Canon Inc, the world’s top maker of digital cameras.
Estimated earnings for companies included in the benchmark are down 66 percent from a year ago, data compiled by Bloomberg show. Companies on the index trade at an average of 1.1 times book value, near its October record low of 1 times book.
The Bank of Japan is considering buying subordinated debt from banks to shore up capital, the Nikkei Shimbun reported.
The cost of protecting investors in Asian bonds from default fell after the G20’s weekend pledges. The Markit iTraxx Japan index of credit-default swaps dropped 5 basis points, Barclays Capital prices showed. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan also lost 5 basis points, ICAP Plc said.
Mazda, partly owned by Ford Motor Co, climbed 9.1 percent to ¥156 (US$1.59). The company will resume full production at two domestic plans in July, the Nikkei Shimbun said on Saturday.
Foxconn gained 7.7 percent to HK$2.66 (US$0.34) in Hong Kong after Macquarie Group raised its rating for the stock to “outperform” from “neutral” because it expects the company to return to profit this year.
HSBC, which is raising US$17.7 billion from a rights offering, rose 1.2 percent to HK$38.70 in Hong Kong.
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AI: Softbank’s stake increases in Nvidia and TSMC reflect Masayoshi Son’s effort to gain a foothold in key nodes of the AI value chain, from chip design to data infrastructure Softbank Group Corp is building up stakes in Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the latest reflection of founder Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence (AI). The Japanese technology investor raised its stake in Nvidia to about US$3 billion by the end of March, up from US$1 billion in the prior quarter, regulatory filings showed. It bought about US$330 million worth of TSMC shares and US$170 million in Oracle Corp, they showed. Softbank’s signature Vision Fund has also monetized almost US$2 billion of public and private assets in the first half of this year,
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