Asian stocks rise on US economic growth optimism; Nikkei soars

Nikkei 225 Stock Average headed for its highest close in nearly six years
 

The MSCI Asia Pacific Index gained 0.7% to 141.98 as of 10:53 am in Hong Kong, with all 10 industry groups on the measure rising.

Sydney: Asian stocks rose, with Japan’s Nikkei 225 Stock Average headed for its highest close in nearly six years as the yen touched a sixth-month low after US employment and consumer confidence reports boosted optimism in the world’s largest economy.

Honda Motor Co. added 2.2% as the yen earlier fell against the dollar, bolstering the profit outlook for Japanese exporters. Warrnambool Cheese & Butter Factory Co. advanced 1.1% after Murray Goulburn Cooperative Co., Australia’s biggest milk processor, raised its takeover offer. Forge Group Ltd. slumped 83% in Sydney after the mining-services firm said it will report a 2014 loss.

The MSCI Asia Pacific Index gained 0.7% to 141.98 as of 10:53 am in Hong Kong, with all 10 industry groups on the measure rising. More than $8 trillion has been added to the value of global equities this year, the biggest increase since 2009, as central banks took steps to shore up economies worldwide. The Asia-Pacific gauge jumped 9% in 2013 through yesterday, while falling 0.9% on the month.

Asia’s earnings growth does remain largely leveraged to the global economy, Michael Kurtz, Hong Kong-based head of global equity strategy at Nomura Holdings Inc., said in an e- mail. Our economists expect the US economy finally to accelerate to a more robust pace in 2014.

Regional gauges

Japan’s Topix index rose 0.7% as Honda gained 2.2% to €4,335. The Nikkei 225 increased 1.2% to 15,631.35, heading for the highest close since December 2007. Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index both gained 0.2%. South Korea’s Kospi index added 0.7%.

Hong Kong’s Hang Seng Index gained 0.6% and China’s Shanghai Composite Index rose 0.7%. Singapore’s Straits Times Index added 0.7% and Taiwan’s Taiex Index climbed 0.8%.

Data on Wednesday showed fewer Americans than projected filed applications for unemployment benefits last week, a sign that the labor market is showing resilience. The Thomson Reuters/University of Michigan final index of consumer sentiment in November unexpectedly rose to 75.1 from 73.2 a month earlier. The median forecast of 65 economists surveyed by Bloomberg called for 73.1.

The Conference Board’s index of US leading indicators, a gauge of the economic outlook for the next three to six months, rose for a fourth straight month in October, reflecting gains in factory orders and applications to build new homes.

Former Federal Reserve chairman Alan Greenspan said the US economy probably will grow more slowly next year than some forecasters predict and indicated that a record US stock market isn’t in a bubble.

US futures

Futures on the Standard & Poor’s 500 Index added 0.1%, with US exchanges closed today for the Thanksgiving holiday. The S&P 500 has climbed 27% this year, heading for the biggest annual gain since 1998, as the Fed pressed on with its stimulus program. The gauge closed at a record 1,807.23 on Wednesday. About 4.8 billion shares changed hands on US exchanges, the slowest trading since 26 August.

The MSCI Asia Pacific Index on Wednesday traded at 13.9 times estimated earnings, close to the multiple of 14 reached on 18 November, which was the highest since May, according to data compiled by Bloomberg. That compares to a current multiple of 16.3 on the S&P 500 and 15.2 for the Stoxx Europe 600 Index.

Bank of Japan governor Haruhiko Kuroda helped drive a 45% surge in Japan’s Topix this year by maintaining monetary easing as he and Prime Minister Shinzo Abe sought to jolt the nation out of 15 years of deflation. The Topix is the best performing of 24 developed markets tracked by Bloomberg, on course for its biggest annual advance since 1999.

Higher bid

Warrnambool Cheese rose 1.1% to A$9.35. Murray Goulburn, which needs Australian regulator approval for its bid, boosted its offer by 5.6% to A$9.50 a share, topping Saputo Inc.’s recommended A$9.20 conditional offer and a cash and share offer from Bega Cheese Ltd.

Cathay Pacific Airways Ltd. added 1.6% to HK$16.78 after UBS AG reiterated its buy recommendation and raised its price forecast for Hong Kong’s biggest carrier.

Forge tumbled 83 percent to 72.5 Australian cents. Forge, whose clients include Rio Tinto Group, lost more than A$300 million ($274 million) in market value to trade as low as 28.5 cents in Sydney today after saying cost overruns and poor management at two Australian projects also forced it to negotiate new debt terms.

TOUHID HUSSAIN
PGDM 2nd YEAR