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Asian stocks rise as US incomes, falling oil boost optimism

Asian stocks rise as US incomes, falling oil boost optimism
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First Published: Tue, Mar 01 2011. 09 47 PM IST
Updated: Tue, Mar 01 2011. 09 47 PM IST
Sydney:Asian stocks rose, driving a regional benchmark index up for the third day as falling oil prices and US data showing higher personal incomes boosted confidence in global economic growth prospects.
BHP Billiton Ltd, the world’s largest mining company, climbed 0.6% in Sydney as copper advanced for the third straight session in New York on Monday. Honda Motor Co. Ltd, Japan’s second biggest car maker, gained 1.8% in Tokyo as the yen also weakened. Shinsei Bank Ltd. jumped 7.7% after Credit Suisse Group AG raised its recommendation on the stock to outperform. Developers rose in Hong Kong on speculation China may hold off interest rate increases.
The MSCI Asia Pacific Index added 1.2% to 139.10 at 7.34pm in Tokyo. The gauge, which advanced 0.6% in February, dropped 2.1% last week as political unrest swept the Middle East. All 10 industry groups tracked on the index rose on Tuesday.
The fact that oil prices may be correcting back to levels that are more reflective of the fundamentals is better for everybody, said Prasad Patkar, who helps manage about $1.8 billion (Rs8,118 crore) at Platypus Asset Management Pty Ltd in Sydney. If oil spikes because of supply disruptions and stays elevated, then it becomes just another tax on growth. The US economy also seems to be on the mend.
Japan’s Nikkei 225 Stock Average gained 1.2%. In Australia, where the central bank on Tuesday left its benchmark interest rate at the highest level in the developed world, the S&P/ASX 200 Index slipped 0.1%. China’s Shanghai Composite Index rose 0.5%, while Hong Kong’s Hang Seng Index gained 0.3%. Markets in South Korea were closed on Tuesday.
Futures on the Standard and Poor’s 500 Index rose 0.4% on Tuesday. The gauge advanced 0.6% in New York on Monday after reports showed personal income improved more than economists expected and a measure of US business conditions rose to its highest level in more than 22 years.
In the US, incomes climbed 1% in January, exceeding the median forecast of economists surveyed and the most since May 2009, according to figures from the commerce department in Washington.
The Institute for Supply Management-Chicago Inc. said on Monday its business barometer rose to 71.2 in February, the highest level since July 1988, from 68.8 in January. Figures greater than 50 signal expansion. The gauge, which was projected to fall, exceeded every estimate of economists surveyed by Bloomberg.
BHP climbed 0.6% to A$46.37 in Sydney, while rival Rio Tinto Group rose 0.5% to A$85.31 as concern eased that rising oil prices would choke off a global economic recovery.
Crude oil for April delivery declined 0.9% to settle at $96.97 a barrel in New York on Monday, the biggest daily drop since 11 February, after Saudi Arabia offered to make up for supplies lost because of unrest in Libya.
Although there’s still uncertainty about what’s happening in North Africa and the Middle East, easing crude futures are supportive for the stock market, said Fumiyuki Nakanishi a strategist at Tokyo-based SMBC Friend Securities Co. The data continues to show the economy is steadily improving.
In Tokyo, Honda climbed 1.8% to 3,610 yen and Sony Corp. Japan’s largest electronics exporter, rose 0.6% to 3,010 yen. Canon Inc., the world’s largest maker of cameras, gained 0.5% to 3,960 yen.
The yen’s depreciation also gave a lift to Japan’s exporters. The currency fell to as low as 82.24 against the dollar, compared with 81.66 at the close of stock trading in Tokyo on Monday. Against the euro, Japan’s currency weakened to 113.53 from 112.39. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency.
Shinsei Bank jumped 7.7% to 112 yen in Tokyo after Credit Suisse raised the lender’s investment rating to outperform from neutral. In Hong Kong, China Overseas Land & Investment Ltd gained 1.9% to HK$13.16 after a report showed China’s manufacturing expanded at the slowest pace in six months, potentially reducing the need for further interest-rate hike.
Bloomberg
Akiko Ikeda and Satoshi Kawano in Tokyo contributed to this story.
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First Published: Tue, Mar 01 2011. 09 47 PM IST
More Topics: Asia | Stocks | Wrap | Credit Suisse | BHP Billiton Ltd |