Asian stocks rose this week, with the regional benchmark index heading for the biggest monthly gain this year, as companies, including BYD Co (比亞迪) and Kobe Steel Ltd forecast profit increases.
BYD, the Chinese automaker partially owned by Warren Buffett’s Berkshire Hathaway Inc, jumped 16 percent in Hong Kong after saying first-half earnings would surge. Kobe Steel, Japan’s third-biggest steelmaker, rose 17 percent in Tokyo trading after it forecast its first profit in three years.
The MSCI Asia Pacific Index added 4 percent to 140.33 this week, touching its highest level since May 2011 on Thursday. The index is headed for a 4.6 percent gain this month, its largest monthly jump this year.
The TOPIX added 3.1 percent in Tokyo, as the Bank of Japan (BOJ) reiterated a pledge to double the nation’s monetary base in two years.
“My feeling is that Asia may start looking healthier going forward, and profit results look okay,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd. “Investors are giving Japan the benefit of the doubt. If it’s a good profit or economic figure, investors say it’s good. And if it’s a bad one, they say it doesn’t matter because the BOJ is doing stimulus.”
As of Friday, the MSCI Asia Pacific Index has climbed 8.5 percent this year amid optimism Japan will deploy more measures to beat deflation and that policymakers in the US and China remain on standby to support growth. The Asian benchmark traded at 14.18 times estimated earnings, compared with 14.35 times for the S&P 500 and 12.84 times for the STOXX Europe 600 Index.
Japan’s Nikkei 225 Stock Average rose 4.3 percent, rising to its highest level since June 20, 2008.
Taiwan’s TAIEX advanced 1.2 percent this week to 8,022.06. Trading was flat on Friday as investors rushed to pocket gains amid fears that the market would pull back after breaching 8,000 points on Wednesday, dealers said.
Australia’s S&P/ASX 200 Index, which was closed for a public holiday on Thursday, rallied 3.4 percent this week, the most since Dec. 2, 2011.
South Korea’s KOSPI gained 2 percent. Hong Kong’s Hang Seng Index added 2.4 percent.
Meanwhile, China’s Shanghai Composite Index fell 3 percent on concern slowing growth would hurt earnings, dragging the benchmark index to a third straight monthly loss. Mainland markets will be closed through Wednesday.
Of the 883 companies on the Asia-Pacific gauge that have reported quarterly earnings this month, and for which Bloomberg has estimates, more than half have missed projections.
Every group on the gauge increased during the week, led by consumer discretionary companies and materials producers.
BYD gained 16 percent this week to HK$28.15, the biggest jump since November, after the maker of the E6 electric car said first-half net income may reach 400 million yuan (US$65 million) to 500 million yuan, up from 16.3 million yuan a year earlier, according to a filing to Shenzhen’s stock exchange on Thursday.
Kobe Steel surged 17 percent to ￥131 this week, its biggest weekly gain since Dec. 21, after it forecast a profit of ￥35 billion (US$357 million) in the year started April 1, beating the ￥8 billion average estimate of 15 analysts compiled by Bloomberg news. Cost cuts, combined with demand for automotive steel in North America and China will help support earnings growth, the company said in a stock exchange filing.