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Asian stocks rose as investors weighed earnings and the likely timing of Federal Reserve interest-rate increases
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Tokyo: Asian stocks rose, with the benchmark index on course to gain for a fourth day, as investors weighed earnings and the likely timing of Federal Reserve interest-rate increases.
NCsoft Corp., a maker of online games, advanced 7.6% in Seoul after reporting quarterly profit rose. Crown Resorts Ltd. soared 5.6% after the Australian casino company posted a 66% increase in full-year net income. Telstra Corp, Australia’s largest phone company, added 2.2% after announcing a share buyback and posting annual profit above estimates. Aiful Corp. plummeted 16% as the Japanese consumer lender said quarterly profit sank 71%.
The MSCI Asia Pacific Index added 0.3% to 147.75 as of 4:21 pm in Hong Kong after rising 2.2% the past three days. All of the gauge’s 10 industry groups advanced on Thursday. A drop in China’s credit expansion on Wednesday added to speculation that policy makers will expand stimulus. In the US, a slowdown in retail sales fueled bets the Fed won’t raise rates earlier than expected.
Even though the Fed is changing the way they talk about rates, we are still far away from seeing higher interest rates, said Donald Williams, Sydney-based chief investment officer at Platypus Asset Management Ltd., which oversees about $1.5 billion. As long as rates stay low, which could be still a couple of years, equities will remain well bid.
Futures on the Standard & Poor’s 500 Index slid 0.1% on Thursday after the measure rose 0.7% on Wednesday. Retail sales were little changed in July, the worst performance in six months, as demand for cars slowed and tepid wage growth restrained US consumers. The slowdown in purchases followed a 0.2% advance in June, the Commerce Department reported on Wednesday in Washington.
Regional gauges
Fed Chair Janet Yellen has said officials will keep the central bank’s benchmark interest rate low for a considerable time after its bond buying ends.
Japan’s Topix index rose 0.7% as the yen fell for a fourth day against the dollar. South Korea’s Kospi index was little changed as the nation’s central bank cut its key interest rate for the first time in more than a year. Australia’s S&P/ASX 200 Index advanced 0.6%, while New Zealand’s NZX 50 Index added 0.2%. Taiwan’s Taiex index was little changed and Singapore’s Straits Times Index fell 0.2%. India’s S&P BSE Sensex Index climbed 0.7%.
The Shanghai Composite Index fell 0.7%. Hong Kong’s benchmark Hang Seng Index slipped 0.4% after closing on Wednesday at the highest level since November 2010. The Hang Seng China Enterprises Index of mainland stocks traded in the city dropped 1.1%.
China stimulus
Chinese stocks closed higher on Wednesday on speculation the government will take steps to support its 7.5% economic expansion goal, after initially falling when the People’s Bank of China reported the lowest level for its broad financing measure since 2008. Barclays Plc is forecasting two second-half interest-rate cuts, while Australia & New Zealand Banking Group Ltd. said a reduction in Chinese banks’ reserve requirements is imminent.
NCsoft soared 7.6% to 155,500 won in Seoul after net income in the second quarter jumped 59% to 54.3 billion won ($53 million) from a year earlier.
Crown Resorts climbed 5.6% to A$15.66 in Sydney after saying net income was A$655.8 million ($610 million) in the year ended June 30 as earnings from its Macau affiliate surged.
Share buyback
Telstra rose 2.2% to A$5.56 after saying it will buy back A$1 billion of stock. Profit rose 14% to A$4.28 billion in the 12 months ended June, the Melbourne-based company said on Thursday. That beat the A$4.2 billion average of eight analyst estimates compiled by Bloomberg.
Aiful plummeted 16% to ¥447 in Tokyo after net income in the quarter ended June slumped 71% to ¥3.6 billion ($35 million) from a year earlier. Nomura Holdings Inc cut the company’s price target to ¥240 from ¥300.
Fairfax Media Ltd., a newspaper publisher, jumped 6.2% to 94 Australian cents after Chief executive officer Greg Hywood said in a conference call that the newspaper publisher’s decline in print advertising had moderated. Earlier, the company reported profit that beat estimates.
Tencent Holdings Ltd lost 2.3% to HK$130.10 as Asia’s biggest Internet company was cut at HSBC Holdings Plc after posting results. Tencent expects growth in mobile-game revenue to plateau as it works to improve quality and expand titles at a business that generates more than half its sales.
Of the companies on the Asian stock gauge that released results from the start of July through yesterday and for which Bloomberg had estimates, 57% beat earnings expectations.
The Asia-Pacific gauge traded at 13.5 times estimated earnings as of yesterday compared with 16.3 for the S&P 500 and 15 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg. BLOOMBERG
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