Asian stocks rose the most in almost three weeks after Sharp Corp. and drugmaker Daiichi Sankyo Co. reported higher third-quarter profits and Rio Tinto Group posted record net income.
“The earnings trend is doing quite well” and exceeding company forecasts, said Masaki Iso, who oversees about $7.3 billion as head of Japanese equities at Yasuda Asset Management Co. in Tokyo.
Toyota Motor Co. and Hyundai Motor Co. led exporters higher after the U.S. Federal Reserve said inflation was easing and a report showed the world’s biggest economy grew at its fastest pace in a year.
The Morgan Stanley Capital International Asia-Pacific Index added 1.1 % to 142.24 at 7:10 p.m. in Tokyo, its biggest jump since Jan. 12. A measure of telecommunications companies posted the biggest gain as all 10 industry groups on the benchmark advanced.
Japan’s Nikkei 225 Stock Average climbed 0.8 % to 17,519.50, closing at the highest since April 7. Stocks also gained after the Nikkei newspaper said analysts forecast the nation’s gross domestic product in the last quarter expanded at a 3.7 % real annual rate.
China’s Shanghai and Shenzhen 300 Index rose following a 6.5 % slide yesterday on concern the nation’s shares are overvalued. Benchmarks elsewhere in the region advanced, except in New Zealand. Malaysia’s market is closed today for a holiday.
Sharp, Japan’s No. 1 maker of liquid-crystal displays, added 1.5 % to 2,085 yen. Net income rose 8.5 % to a record 28.5 billion yen ($236.3 million) in the quarter ended 31Dec. , on demand for its Aquos flat-screen televisions and handsets, the company said yesterday after the close of trading.
Daiichi Sankyo, Japan’s second-largest drugmaker, surged 5.1 % to 3,530 yen. It yesterday raised its full-year net income forecast by 13 % to 71 billion yen after reporting higher third-quarter earnings.
NTT DoCoMo Inc. jumped 2.2 % to 188,000 yen. Japan’s biggest mobile-phone operator reported an 18 % gain in profit from operations in the third quarter. Net income declined 28 % because sales of shareholdings inflated the comparable figure for a year-earlier.
Rio Tinto, the world’s No. 2 mining company by market value, climbed 2.2 % to A$78.29. The company said after the Australian market closed that full-year profit rose 43 % to a record $7.44 billion after prices for copper and iron ore surged on demand from China. Rio also increased dividends by 30 %.
Alumina Ltd., which owns 40 % of the world’s biggest alumina producer, jumped 5.6 percent to A$6.82. Second-half profit rose 65 % from a year earlier to A$251.1 million ($195 million), the company said.
‘Raking In Cash’
“The miners are raking in cash, enough to keep investors interested in their shares for the rest of this year,” said Donald Williams, who helps manage $87 million at Platypus Asset Management in Sydney. “Rio’s result was always going to attract interest this week because it’s a gauge for the industry.”
U.S. stocks climbed yesterday, completing their longest stretch of monthly gains in more than a decade. Fed policy makers yesterday left their benchmark lending rate unchanged at 5.25 percent and said the economy is picking up while the pace of price increases has slowed.
Toyota, Japan’s largest automaker, rose 0.5 % to 7,990 yen. AU Optronics Corp., the world’s No. 3 liquid-crystal display maker, gained 2.8 % to NT$44.90.
The Fed statement followed a report by the Commerce Department that said gross domestic product increased at a 3.5 % annual rate, thanks to a rebound in consumer spending as gasoline prices fell and wages grew. The pace is the strongest since the first three months of 2006 and exceeded the median estimate of 3 % by 77 economists in a Bloomberg survey.
“The U.S. GDP figure was better than expected and inflation concern is receding,” said Kim Jun Ki, who manages about $1.1 billion in equities at Hanwha Investment Trust Management Co. in Seoul. “It’s a double-barreled positive signal to the market.”
Sony Corp., the world’s second-largest consumer-electronics maker, added 2 percent to 5,660 yen. The stock also gained after Nikko Citigroup Ltd. boosted its rating to “buy” from “hold,” saying the company’s restructuring efforts helped boost profits at its electronics division last quarter and should provide future benefits.
Hyundai Motor, South Korea’s largest automaker which sells four out of five cars it makes overseas, climbed 1.3 percent to 68,000 won. LG.Philips LCD Co., the world’s No. 2 maker of liquid-crystal displays, rose 1.5 percent to 26,650 won.
Separately, South Korean exports increased 21.4 percent in January, the fastest pace in more than two years, the government said. The median estimate of 15 economists in a Bloomberg survey was 19.7 percent.
China’s Shanghai and Shenzhen 300 rose 0.4 percent. The index yesterday fell 6.5 percent, its biggest slump since it was created in April 2005, after Cheng Siwei, vice chairman of the National People’s Congress, said China’s shares are overvalued. The measure surged 121 percent last year.
Baoshan Iron & Steel Co., China’s biggest steelmaker, lost 3.6 percent to 9.42 yuan. Daqin Railway Co., the operator of China’s largest coal transport network, tumbled 5.2 percent to 9.99 yuan.
China’s “stock markets are clearly in bubble-land,” said Chua Soon Hock, who manages about $300 million at Asia Genesis Asset Management in Singapore. This year “may end with many Asian stock markets in negative territory, contrary to widely held bullish expectations.”
Citic Securities Co., China’s largest publicly traded brokerage, gained 2.3 percent to 35.77 yuan. The nation’s more than 100 brokerages had a combined profit of 25.5 billion yuan ($3.3 billion) last year after four years of losses, the China Securities Journal said, citing unidentified industry officials.
The Nikkei’s report on Japan’s gross domestic product was based on the average of forecasts released by 14 research institutes as of yesterday. The Cabinet Office will announce official preliminary GDP figures for the three months to December on 15 Feb. The Nikkei report on higher economic growth “is good for domestic consumption expectations,” said Yasuda’s Iso.
Mitsubishi Estate Co., Japan’s biggest property developer by market value, rose 2.9 % to 3,550 yen. Mitsui Fudosan Co., Japan’s largest property developer by sales, advanced 1 % to 3,160 yen.
Real-estate stocks also climbed after the Nikkei reported that overseas investment banks such as Morgan Stanley are stepping up acquisitions of Japanese real estate in pursuit of higher returns.
Meanwhile, shares of Nikko Cordial Corp., Japan’s third- largest brokerage, had the biggest two-day decline in at least 22 years. The stock dropped 16 % to 1,000 yen, the lowest in 18 months. It slumped 15 % yesterday.
An outside panel on 30 Jan. accused former managers of padding earnings in 2004. The widening scandal may cost the brokerage its stock market listing.
The Tokyo Stock Exchange yesterday said it will use the panel’s findings in deciding whether to remove Nikko. A company may be delisted if it makes “false statements” in annual or semi-annual reports, and those statements have a “material impact,” according to the exchange’s website.