BS: Asian Stocks Advance to Two-Week High; Cotton Rises to Record
Feb. 2 (Bloomberg) -- Asian stocks rose to a two-week high, led by the Nikkei 225 Stock Average’s best rally since November, as higher sales and earnings pointed to faster economic growth. Cotton climbed to a record while corn and soybeans advanced.
The MSCI Asia Pacific Index gained 1.3 percent to 139.23 as of 3 p.m. in Tokyo, poised for its highest close since Jan. 19. The Nikkei 225 jumped 1.8 percent. Standard & Poor’s 500 Index futures were little changed after a two-day jump in the gauge. The dollar weakened to its lowest level in three months against the euro. Cotton added as much as 2.1 percent in New York, while corn and soybean futures rallied to 30-month highs.
Investor confidence improved as Toyota Motor Corp. led gains for Asian automakers’ U.S. sales in January and Casio Computer Co., a maker of consumer electronics, turned to profit. Data this week is forecast to show increasing employment in the world’s largest economy, after reports yesterday pointed to manufacturing growth in the U.S., China and Europe. Concerns that the Middle East’s turmoil will spread eased as Egyptian President Hosni Mubarak said he won’t seek a new term.
“No doubt I’m more confident of the global economy, though there’s still lingering fear of rate hikes,” said Pankaj Kumar, who oversees $560 million as chief investment officer of Kurnia Insurans Malaysia Bhd. near Kuala Lumpur. “As long as earnings numbers come in better than expected, markets will rejoice.”
Five stocks advanced for each that fell on MSCI’s Asian index, which was set for its biggest gain since Dec. 2. Losses earlier this week pushed the average price of stocks on the gauge to below 14 times estimated earnings, the lowest level since September. The Nikkei 225 also posted its steepest rally since Dec. 2.
Toyota, Casio
Toyota, Japan’s largest automaker, rose 3.3 percent after saying sales in the U.S. jumped 17 percent last month, beating the 16 percent average of four estimates compiled by Bloomberg. Casio, which gets about 48 percent of its revenue outside Japan, surged 6.6 percent after reporting net income for the nine months ended Dec. 31 of 4.65 billion yen ($57 million), compared with a net loss a year earlier.
Paladin Energy Ltd. climbed 5.8 percent in Sydney after saying it completed its purchase of Aurora Energy Resources Inc.’s uranium assets.
Financial markets in China, South Korea, Taiwan and Vietnam are closed for the Lunar New Year holidays. China’s Premier Wen Jiabao pledged to curb property speculation and add more affordable housing, according to his New Year speech posted yesterday on the website of the state-run People’s Daily newspaper.
Asian central banks may need to raise interest rates further to limit the risk of overheating in their economies, International Monetary Fund Managing Director Dominique Strauss- Kahn said yesterday in Singapore. Indonesian policy makers may keep interest rates at a record low after a Feb. 4 meeting, 16 of 22 economists surveyed by Bloomberg News said.
Jobs, Manufacturing
U.S. stocks advanced yesterday, pushing the Dow Jones Industrial Average to its first close above 12,000 since June 2008, after manufacturing data and United Parcel Service Inc.’s earnings beat estimates. About 73 percent of the 214 companies on the S&P 500 that reported earnings since Jan. 10 topped analysts’ projections, according to Bloomberg data.
Companies in the U.S. probably boosted payrolls by 140,000 in January after a 297,000 gain in December, according to economists surveyed by Bloomberg News before ADP Employer Services reports the figures today. A Feb. 4 Labor Department report may show non-farm payrolls climbed by 142,000 in January after a 103,000 gain in December, according to a separate Bloomberg survey.
Treasury Yields
Stocks rallied yesterday while the dollar and Treasuries fell after the Institute for Supply Management reported its factory index rose to 60.8 in January, beating all 78 estimates in a Bloomberg survey of economists.
The dollar traded at $1.3840 per euro from $1.3829 in New York yesterday. The U.S. currency extended yesterday’s 1 percent decline and reached $1.3862 today, the weakest level since Nov. 9. Treasury yields were near a one-month high, with the rate on benchmark 10-year notes at 3.43 percent.
“The market’s focus is trained on the strong U.S. and Europe data,” said Azmi Shukri Rahman, a foreign-exchange trader at CIMB Investment Bank Bhd. in Kuala Lumpur. “Risk is back on the table.”
One-month forwards contracts for South Korea’s won rose 0.1 percent to 1114.03 per dollar in offshore trading, reflecting bets for a 0.3 percent advance from the currency’s closing level of 1,116.95 yesterday in Seoul, according to data compiled by Bloomberg.
Mubarak’s Concession
Egypt’s bonds gained yesterday for the first time in six days on speculation the government will honor its obligations. The cost of protecting the country’s debt against default with credit-default swaps fell 70 basis points, the most ever, to 350, CMA prices show. Mubarak said he’ll stay on to ensure “stability” and push through political and economic changes as opposition leaders and protesters rejected his concessions.
Credit risk fell in Asia, with the Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan declining 1.5 basis points to 107 basis points, according to Royal Bank of Scotland Group Plc prices.
Cotton futures in New York rose to $1.758 a pound, an all- time high. Corn and soybeans gained to the highest levels since July 2008 as a strike by Argentina’s port workers halted ships and boosted demand for U.S. supplies. Corn climbed as much as 0.5 percent to $6.6950 a bushel in Chicago, while soybeans advanced as much as 0.5 percent to $14.4575 a bushel.
Copper Nears $10,000
Copper for three-month delivery traded little changed after earlier rising as much as 0.4 percent to $9,984.75 a metric ton on the London Metal Exchange, surpassing the previous peak of $9,968 a ton. Futures gained as much as 0.3 percent to $4.5595 a pound on the Comex in New York, also a new high.
“The market likes to test big, round numbers, and we’re looking increasingly at $10,000 pretty soon,” said Yingxi Yu, a Singapore-based analyst at Barclays Capital. “Strong macroeconomic data have provided the lift to market sentiment needed for the current rally.”
Oil for March delivery dropped 0.3 percent, following a 1.5 percent decline yesterday as concern eased that Egypt’s anti- government protests will disrupt supplies through the Suez Canal. Organization of Petroleum Exporting Countries Secretary-General Abdalla el-Badri said Jan. 31 the producer group will increase output if the protests interrupted transportation.
--With assistance from David Yong, Jake Lloyd-Smith, Luzi Ann Javier, Wes Goodman and Katrina Nicholas in Singapore, Candice Zachariahs in Sydney, Anna Kitanaka, Norie Kuboyama and Yoshiaki Nohara in Tokyo. Editors: Darren Boey, James Regan.
To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net.
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
