Asian Stocks Advance As Wen Signals More China Stimulus By Kana Nishizawa and Norie Kuboyama - Aug 16, 2012 10:54 AM
Asian stocks rose as Chinese Premier Wen Jiabao said easing inflation is allowing room to adjust monetary policy and positive signs are emerging in the world’s second-largest economy.
Fanuc Corp. (6954), a maker of industrial robots that gets almost half its sales from Asia outside Japan, gained 2.9 percent in Tokyo. Goodman Fielder Ltd., an Australian baker, fell 1.8 percent after saying it hasn’t received a takeover proposal from Wilmar International Ltd. Lenovo Group Ltd. (992), a Chinese personal- computer maker, may be active today in Hong Kong after its first-quarter profit increased. The MSCI Asia Pacific Index rose 0.3 percent to 120.21 as of 9:51 a.m. in Tokyo. twice as many stocks advanced as declined before the open of markets in Hong Kong and China.
“Monetary easing is taking effect in China,” said Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co., which oversees about $70 billion. “Wen’s remarks are pushing it, and that’s a positive catalyst for the markets. The Premier seldom makes such direct remarks, but he might want to emphasize that government wants to support the economy by monetary policies.”
The MSCI Asia Pacific Index (MXAP) fell 7 percent from this year’s high on Feb. 29 through yesterday amid concern Europe’s sovereign-debt crisis will worsen and China’s economy is slowing. The regional benchmark index traded at 12.4 times estimated earnings compared with 13.6 times for the S&P 500 Index and a multiple of 11.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Nikkei, Kospi Japan’s Nikkei 225 Stock Average increased 0.9 percent and Australia’s S&P/ASX 200 Index (AS51) gained 0.5 percent. South Korea’s Kospi Index declined 0.2 percent after reopening following a holiday yesterday.
China’s state television reported Wen as saying there’s “growing room for monetary policy operation” during a two-day inspection tour in the eastern province of Zhejiang. “We have the conditions and capabilities, and will be sure to fulfill this year’s economic and social development targets,” Wen said, the official Xinhua News Agency reported yesterday. He said downward pressure on the economy remained “relatively large,” according to state radio. Fanuc gained 2.9 percent to 12,940 yen in Tokyo, while Komatsu Ltd., a Japanese construction-equipment maker that gets about 10 percent of its revenue from China, advanced 2 percent to 1,719 yen.
U.S. Manufacturing Futures on the Standard & Poor’s 500 Index (SPXL1) rose 0.1 percent today. The gauge rose added 0.1 percent yesterday in New York as investors weighed manufacturing data for clues on whether the Federal Reserve will move to stimulate the economy. Industrial production in the U.S. increased in July, while a separate report showed manufacturing in the New York area unexpectedly contracted in August for the first time since October.
“The U.S. economic data are mixed and business sentiment is neither good nor bad,” said Mitsushige Akino, who oversees about $633 million in Tokyo at Ichiyoshi Investment Management Co. “That’s boosting expectations the Fed may add to quantitative easing.”
Goodman Fielder lost 1.8 percent to 54.5 Australian cents in Sydney. The company said it hasn’t received a takeover proposal from Singapore-based Wilmar after the world’s largest palm-oil processor said it had planned a bid. Wilmar’s Chief Executive Officer Kuok Khoon Hong said yesterday the company had discussed offer prices with Goodman’s board after taking a 10 percent stake in the baker on Feb. 28. There was no formal bid and Wilmar was now prepared to sell its holding, he said.
