Asian stocks climbed for a third straight week as profits at companies from Sony Corp to Tata Motors Ltd exceeded estimates, lifting confidence the global economy is recovering.
Sony, the maker of Vaio computers and PlayStation 3 game consoles, jumped 12.9 percent in Tokyo as cost cuts led to a smaller-than-expected loss. Tata, the Indian automaker that owns Jaguar and Land Rover, rallied 13.1 percent following a gain in net income as production costs fell. PT Bumi Resources, Indonesia’s biggest coal producer, soared 37 percent after raising US$375 million to buy back shares and fund expansion.
The MSCI Asia-Pacific Index advanced 3.6 percent this week to a 10-month high of 111.88. That capped an 8.4 percent climb last month and a fifth month of increases. Asian markets have rallied 58 percent since the MSCI benchmark dropped to a more-than five-year low on March 9.
“An earnings and economic recovery in the second half was rather like a wishful thought,” said Yoshinori Nagano, a senior strategist at Tokyo-based Daiwa Asset Management Co, which oversees the equivalent of US$90 billion. “That’s getting more likely now and increasing investors’ appetite for risk assets.”
Japan’s TOPIX index completed an 11-day winning streak, the longest since 1990, to rise 3.2 percent for the week.
Bumi helped Indonesia’s Jakarta Composite index rise 6.3 percent, the region’s strongest rally. China’s Shanghai Composite Index ended 1.2 percent higher, rebounding from its biggest one-day drop since November on Wednesday.
Sony climbed 13 percent to ¥2,675. The company reported a first-quarter net loss on Thursday that was less than half analysts’ estimates. Nomura Holdings Inc lifted its rating on the stock to “buy” from “neutral.”
“The April-June result was a surprise,” Nomura’s Eiichi Katayama wrote in a report. Cost cutting is progressing faster than expected and further reductions in purchasing expenses could lead to higher earnings forecasts, he said.
Taiwanese share prices are expected to trade in a narrow range as market sentiment turns cautious before high-tech firms release sales data for last month, dealers said on Friday.
Investors are watching the US closely for more economic data such as consumer prices in an attempt to get a clearer picture of the global economy, they said.
Wall Street is likely to continue dictating the direction of the local bourse as foreign institutional investors tend to follow US market movements, they added.
As it moves closer to 7,200, the market is expected to encounter profit taking pressure before moving below 7,000 with technical support at around 6,900, dealers said.
For the week, the weighted index rose 104.43 points, or 1.5 percent, to 7,077.71 after a 1.78 percent increase a week earlier. Average daily turnover stood at NT$146.38 billion (US$4.46 billion), compared with NT$143.43 billion a week ago.
While Taiwan Semiconductor Manufacturing Co (台積電) posted a jump in net profit for the second quarter on global demand, investors need more information to decide whether a broader recovery is on track, Grand Cathay Securities Corp (大華證券) analyst Mars Hsu said.
“TSMC represents just the upstream electronic sector. We want to know whether high-tech firms in the middle and downstream segments also fare well,” Hsu said.
Other regional markets on Friday:
JAKARTA: Up 1.09 percent. The Jakarta Composite Index gained 25.10 points to 2,323.23.
KUALA LUMPUR: Up 1.23 percent. The Kuala Lumpur Composite Index gained 14.24 points to 1,174.90.
MANILA: Up 1.21 percent.
The composite index rose 33.15 points to 2,798.33.
MUMBAI: Up 1.83 percent. The 30-share SENSEX rose 282.35 points to 15,670.31.
The index hit its highest level in more than a year.
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