Sydney: Asian stocks climbed to a record, led by Canon Inc. and Samsung Electronics Co., buoyed by lower oil prices and speculation the U.S. Federal Reserve will cut interest rates in the region’s biggest export market.
“Investors switched to the view that a rate cut may happen sooner than they anticipated and that boosted shares,’’ said Kenji Tomida, who oversees $16 billion (Rs65,024 crore) as chief fund manager at T&D Asset Management Co. in Tokyo.
The Morgan Stanley Capital International Asia-Pacific Index added 1.4% to 149.39 at 11:23 am in Tokyo. All 10 industry groups advanced. Sumitomo Metal Mining Co. led mining shares higher after the price of copper climbed and nickel reached a record high.
Japan’s Nikkei 225 Stock Average gained 1.5% to 17,662.34. The nation’s markets were closed for three-days last week. All indexes in the region rose, except in Malaysia. China and Thailand are closed for holidays.
U.S. stocks climbed for a fifth straight week, the longest advance since October after the Labor Department said U.S. employers last month added the fewest jobs in more than two years.
Canon, the world’s largest seller of digital cameras, rose 2.9% to 7,010 yen. Samsung, the second-largest semiconductor maker, climbed 1.7% to A$586,000 won.
Toyota Motor Corp., Japan’s largest carmaker, added 0.7% to 7,280 yen. Honda Motor Co., the No. 2 automaker by sales, rose 1.5%, to 4,100 yen. Toyota generated more than a third of its fiscal 2006 revenue in North America, while Honda had 55% of its sales there.
The 88,000 increase in U.S. employment last month followed a 177,000 gain in March that was smaller than previously estimated. The jobless rate rose to 4.5% from 4.4%, which matched a five-year low. The report also showed that average hourly earnings grew at a rate that trailed economists’ forecasts.
The data spurred traders to increase bets the Fed will lower interest rates this year after increasing them from 2004 to 2006.
Oil fell for a sixth day in New York, extending a 6.8% drop last week because of ample U.S. supplies and signs gasoline output is rising as refiners return plants from maintenance. Crude for June delivery was recently trading at $61.67. Lower fuel prices give consumers more to spend on goods and services.
Sumitomo Metal Mining, Japan’s biggest nickel producer, gained 4%, to 2,585 yen. Korea Zinc Co., the world’s second-biggest smelter of the metal, rose 3.4% to 154,000 won. BHP Billiton Ltd, the world’s biggest mining company, gained 2.4% to A$31.33.
A measure of six metals traded on the London Metal Exchange, including copper and zinc, climbed 2.1% on 4 May. Copper rose 0.8%, while Nickel jumped 3.6% to a record high.
“Mining companies will eventually get re-rated by the market if metals prices manage to stay close to these levels because it will demonstrate that their earnings are more sustainable than the market has been giving them credit for,’’ said Adnan Kucukalic, a Sydney-based strategist at Credit Suisse Group.