Asian shares rose this week with Japan's stock benchmarks having their biggest weekly gains in 10 months. Exporters including NEC Corp and Hon Hai Precision Industry Co advanced after US reports boosted optimism that growth will accelerate in the world's largest economy.
"There's been an improvement in overseas demand and the recent news has been encouraging," said Graeme Sinclair, who helps handle US$3 billion in Asian equities as investment director at Aberdeen Asset Management Asia Ltd in Singapore.
Taiwan's TWSE Index jumped 4.9 percent this week to reach a 14-month high. Hong Kong's Hang Seng rose in each of the past five days, having its longest winning streak in almost nine months and its biggest weekly gain in 10 months. South Korea's Kospi index added 3.3 percent in a week shortened by a Friday holiday. Its gain was the largest since the week ended June 13.
PHOTO: SEAN CHAO, TAIPEI TIMES
Companies named as additions to Morgan Stanley Capital International Inc's standard indexes of global stocks such as Japan's Seiko Epson Corp and India's Maruti Udyog Ltd also rose.
The Nikkei 225 Stock Average's 5.8 percent surge this week to 9863.47, and a 5.2 percent rise in the Topix index to 964.78 in Japan led gains in Asia. Both indexes had their biggest weekly jumps since the week ended Oct. 18, 2002.
Yesterday, US stock benchmarks were little changed in the slowest trading of the year as the biggest electrical blackout in North American history kept traders from their desks. American Power Conversion Corp and United Technologies Corp led a rally in companies that may gain business from the power failure.
The Standard & Poor's 500 Index rose 0.16 to 990.67 after fluctuating between a 0.2 percent gain and a 0.4 percent loss, the narrowest range this year. The Dow Jones Industrial Average climbed 11.13 to 9321.69 and the NASDAQ Composite Index advanced 1.67 to 1702.01.
Complications
New York City, the US North-east and Midwest and Canada remained without full power more than 24 hours after the blackout, which disrupted transit systems and electricity for 49 million households. General Motors Corp and other companies idled dozens of factories.
Even so, Asian exporters rose after signs the US economy is improving.
Japan's NEC, which gets a third of its sales from abroad, surged 14 percent to 846 yen this week. Taiwan's Hon Hai, the island's biggest electronics company by revenue, jumped 9.4 percent to NT$133.50 in that time.
Toyota Motor Corp, which gets 80 percent of its operating profit from North America, rose 7.5 percent to ?3,280. Honda Motor Co, which gets more than half of its revenue from the US, added 6.1 percent to ?4,880.
A US government report that initial filings for jobless benefits were less than 400,000 for a fourth consecutive week reinforced comments from the US Federal Reserve that US economic growth may be accelerating.
Demand for cars and electronics also helped US retail sales rise 1.4 percent in July, the Commerce Department reported.
"The US economic recovery is the main theme in the market these days, helping boost stock prices of exporters," said Lee Young Ho, who manages the equivalent of US$509 million at Kyobo Investment Trust Management Co in Seoul.
South Korea's Samsung Electronics Co, which generates about a fifth of its sales in the US, jumped 4.7 percent to 425,000 won. Hyundai Motor Co, the nation's largest automaker whose exports account for more than half of sales, rose 2.8 percent to 35,200 won.
Exports
Hong Kong's Hang Seng Index rose 4.8 percent to 10,424.56 this week. Li & Fung Ltd., which buys Asian-made clothing for US companies such as Abercrombie & Fitch Co, added 14 percent to HK$11.95.
Seiko Epson, Japan's largest maker of inkjet printers, climbed 4.4 percent to ?3,330. Maruti Udyog, India's biggest carmaker, added 10 percent to 216.95 rupees in the past five days, its fourth straight week of gains.
The companies will be added to MSCI's standard indexes of global stocks from next month, MSCI said.
Some US$3 trillion is benchmarked to MSCI indexes globally, according to the index compiler, which is majority-owned by Morgan Stanley. In the US, more than 90 percent of international institutional equity assets are benchmarked to MSCI's indexes.
Good news
Australia's News Corp, the world's fifth-largest media company, added 5.1 percent over the week to A$12.35.
The company, which relies on the US for 75 percent of its revenue, reported its biggest quarterly profit in three years. The S&P/ASX 200 Index dropped 1.40 points to 3148, completing its first losing week in six.
"News Corp has probably become the bellwether media stock," said Uri Landesman, who helps manage about US$360 million for Federated Investors, owner of 238,502 News Corp American depositary receipts in June.
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