Home / World Business
Sun, Jul 26, 2009 - Page 10 News List

Asian stocks advance on corporate earnings optimism

LOSING STEAM: Taiwanese shares may pass 7,000 points next week, although the market is likely to be quiet ahead of the release of electronics companies’ Q2 results

BLOOMBERG AND AFP , TAIPEI AND HONG KONG

Asian stocks advanced for a second week, sending the MSCI Asia-­Pacific Index to its biggest gain since May on speculation a recovery in the global economy will boost corporate earnings.

James Hardie Industries NV, the biggest seller of home siding in the US, surged 24 percent in Sydney after reports showed US homes prices climbed. Chartered Semiconductor Manufacturing Ltd (特許)the world’s third-largest maker of customized chips, gained 6.7 percent in Singapore after reporting a lower-than-forecast loss in the second quarter. Jiangxi Copper Co (江西銅業), China’s largest producer of the metal, advanced 16 percent in Shanghai after copper prices advanced.

“The data is showing that things are past their worst,” said Tim Schroeders, who helps manage US$1 billion at Pengana Capital Ltd in Melbourne. “If we’ve seen a bottom, and things continue to improve in the second half, it just may be enough to buoy earnings.”

The MSCI Asia-Pacific Index climbed 4.5 percent to 108.00 this week, the biggest advance since the period ended May 8. The gauge has rallied 53 percent from a five-year low on March 9 amid optimism stimulus policies around the world will revive the global economy. The MSCI World Index gained 4.6 percent this week.

The MSCI Asia-Pacific Index has risen this week as US companies including Apple Inc reported better-than-expected results. South Korea said on Friday economic growth accelerated in the second quarter, while US data released on Thursday showed sales of existing homes rose 3.6 percent last month.

The data provided further evidence that the global economic recovery is on track. Last week, China and Singapore also reported economic growth accelerated in the second quarter.

Taiwanese shares are expected to move around the 7,000-point level in the week ahead, which will provide stiff resistance after recent significant gains, dealers said.

As the market repeatedly failed to leap the psychological hurdle this week, many investors have turned cautious in the near term, they said. Even if the market does pass 7,000, profit-taking is expected to immediately follow, while technical support may be seen at around 6,800.

With electronics firms, including Taiwan Semiconductor Manufacturing Co (台積電) reporting second-quarter results next week, the market is likely to be quiet before fresh hints on industrial fundamentals, they added.

For the week to July 24, the weighted index rose 122.29 points, or 1.78 percent, to 6,973.28 after a 1.2 percent increase a week earlier.

Average daily turnover stood at NT$143.43 billion (US$4.37 billion), compared with NT$128.01 billion a week ago.

“The market is running out of steam after a recent strong showing. Consolidation is expected to dictate market movements over the next few sessions,” Taiwan International Securities (金鼎證券) analyst Arch Shih (施博元) said.

Other markets on Friday:

TOKYO: Up 1.55 percent. The Nikkei-225 climbed 151.61 points to 9,944.55. The index is at its highest in more than three weeks. Investors stopped short of pushing the Nikkei past 10,000 as concerns emerged that Wall Street may see profit-taking.

HONG KONG: Up 0.83 percent. The Hang Seng Index closed up 165.09 points at 19,982.79. The market had briefly gone as high as 20,063.39 soon after the opening due to hopes for the US economy.

SYDNEY: Up 0.63 percent. The S&P/ASX 200 added 25.7 points to reach 4,089.8.

This story has been viewed 1663 times.
TOP top