Asian stocks rise due to yen, good US, China data

Bloomberg and Staff writer, with CNA

Sun, Jan 20, 2013 - Page 15

Asian stocks rose this week, with the benchmark index capping its eighth gain in nine weeks, as economic reports in the world’s two largest economies beat estimates and a weaker yen boosted Japan’s exporters.

Sony Corp surged 17 percent this week in Tokyo after announcing the sale of its New York headquarters for US$1.1 billion. Li & Fung Ltd (利豐), a supplier to Wal-Mart Stores Inc, dropped 14 percent in Hong Kong after saying operating income slumped 40 percent last year.

The MSCI Asia Pacific Index rose 0.7 percent to 132.72 this week after last week snapping a seven-week winning streak.

The regional gauge is extending its two-month rally amid signs US and Chinese economies are recovering and amid surge in Japanese stocks on speculation that Japanese Prime Minister Shinzo Abe will pursue aggressive stimulus policies.

Stocks on Asia’s benchmark index were valued at 14.3 times estimated earnings on average, compared with about 13.4 times for the Standard & Poor’s 500 Index and 12.1 times for the STOXX Europe 600 Index, data compiled by Bloomberg show.

South Korea’s KOSPI slid 0.4 percent, while Taiwan’s TAIEX fell 1.1 percent to 7,732.87 on Friday, compared with 7,819.15 on Jan. 11.

With equity markets awash in liquidity, share prices on Taiwan’s main board are unlikely to suffer a major pullback in the short term, analysts said yesterday.

The benchmark weighted index ended up 1.52 percent on Friday, helped by an infusion of funds from foreign institutional investors, who bought a net NT$3.43 billion (US$118 million) in local shares.

Wu Yin-liang, a fund manager at Taishin Securities Investment Trust (台新投信), said liquidity-driven buying could push share prices higher and even challenge the 8,000-point level this year.

In addition to strong liquidity, traders said the TAIEX should also benefit from a recovery in the global economy, in particular the faster pace of growth in China.

China’s economy grew 7.9 percent in the fourth quarter, up from 7.4 percent in the third quarter.

Japan’s Nikkei 225 Stock Average gained 1 percent this week, while the broader TOPIX capped its longest weekly winning streak since 1986 as the yen fell to a two-and-a-half year low against the US dollar. A weaker yen boosts overseas income at Japanese companies when converted.

Hong Kong’s Hang Seng Index gained 1.5 percent this week, as China’s Shanghai Composite Index gained 3.3 percent after data showed the economy grew more than estimated in the fourth quarter.

Shares also climbed after China’s securities regulator said the nation can increase by 10 times the size of two investment programs that allow foreign investors to buy securities.

In other markets on Friday:

Mumbai

rose 0.38 percent, or 75.01 points, from Thursday to 20,039.04.

Wellington fell 0.78 percent, or 32.63 points, to 4,164.18.

Manila closed 1.10 percent higher, adding 67.03 points to end at 6,139.21.