Asian stocks rose this week for the first time in three, as a series of positive US economic data boosted optimism in the world’s largest economy and eased concern Europe’s debt crisis will erode global demand.
The MSCI Asia Pacific Index rose 1.1 percent this week, erasing its drop at the week-start on news North Korean leader Kim Jong-il died. The gauge tumbled 17 percent this year amid concern Europe’s debt crisis would slow global economic growth. Stocks in the index were valued at 12.69 times estimated earnings on average, compared with 12.80 times for the S&P 500.
“The US is showing it’s fairly robust in terms of not being dragged down to the extent of European economies,” Tim Schroeders of Pengana Capital Ltd in Melbourne said. “The question is, given we are coming into a holiday period, how sustainable those gains are going to be over the next week or so.”
Utilities posted the biggest decline among the 10 industry groups in the Asia-Pacific gauge this year as Japanese electricity generators tumbled after meltdowns at Tokyo Electric Power Co’s Fukushima Dai-ichi nuclear power plant. The utility fell 3.1 percent this week, extending its rout this year to 89 percent.
South Korea’s KOSPI ended 1.5 percent higher this week, even after plunging as much as 4.9 percent on Monday amid concern Kim’s death would lead to instability in the region. Japan’s Nikkei 225 Stock Average slid 0.1 percent, unable to recover from its earlier drop with a trading day cut short for a public holiday.
Taiwan’s TAIEX jumped 4.8 percent this week to 7,110.73 after Vice Premier Sean Chen (陳?) said the National Stabilization Fund would buy stocks to support local markets when necessary.
Hong Kong’s Hang Seng Index added 1.9 percent and Singapore’s Straits Times Index rose 0.7 percent. The Shanghai Composite Index slipped 0.9 percent, while Australia’s S&P/ASX 200 fell 0.5 percent.
Hong Kong and Australian markets will be shut tomorrow and Tuesday. Singapore’s market will be closed tomorrow, while South Korea will not be trading on Friday.
In the US, a report on Tuesday showed builders broke ground last month on 685,000 houses, the most since April last year and exceeding the highest estimate of economists surveyed by Bloomberg News.
Confidence among US consumers rose more than forecast this month to a six-month high, according to the Thomson Reuters/University of Michigan sentiment index. A gauge of US leading indicators climbed more than estimated last month, a sign the economy will keep growing next year.
“The US economic outlook is getting brighter and you get a sense that the economy is recovering gradually,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “An improvement in the German economy is also a positive contrast to the bleak situation in Europe.”
HTC Corp (宏達) surged 17 percent to NT$513 in Taipei after saying it plans to buy back 10 million common shares, 1.16 percent of its outstanding stock, from open market. The shares also gained after HTC chief executive Peter Chou (周永明) said the company would work around a US agency ruling that found a user interface in some handsets infringed an Apple Inc patent.
“The US is showing signs of recovery and investors think that the worst is over for 2011 and next year will be better,” said Francis Lun (藺常念), managing director at Lyncean Holdings Ltd. “If you have an economic recovery in the US and Europe, it will benefit Asia because they are the two biggest export markets for Asia. The risk is that the recovery may be short-lived.”