Barefoot Investor: Asia Stocks Set for Biggest Week Since 2009 on U.S. Data, Europe

Asian stocks rose, sending the regional benchmark index toward its biggest weekly gain in more than two years, as the fastest U.S. economic growth in a year and Europe’s debt deal boosted the outlook for exporters.

Honda Motor Co., Japan’s second-largest carmaker by market value that gets 83 percent of its revenue abroad, rose 4.6 percent after U.S. household purchased beast estimates. Industrial and Commercial Bank of China Ltd. rose 1.8 percent as Europe’s announcements eased concerns about the global financial system. as copper prices headed for the biggest weekly gain since at least 1986. Jiangxi Copper Co., China’s No. 1 producer of the metal by market value, rose 2.4 percent to HK$20.20 as copper had its best week in at least 25 years.

“Consumer spending has contributed a lot into the U.S. growth, while inventory investment declined,” said Masaru Hamasaki, who helps oversee the equivalent of $24 billion as chief strategist at Toyota Asset Management Co. in Tokyo. “That’s a very good form of growth. Risk appetite should rise after Europe delivered a big answer to the debt crisis that’s plagued the market for a long time. I expect stocks to be firm after jumping.”

The MSCI Asia Pacific Index rose 1.4 percent to 124.68 as of 12:18 a.m. in Tokyo. The measure has gained 7.4 percent this week, the most since the week ended May 8, 2009. More than three stocks rose for each that fell on the gauge, which is set for its biggest month of increase since May 2009. All 10 industry groups on the gauge advanced.

U.S. Growth

Futures on the Standard & Poor’s 500 Index fell 0.4 percent. In New York, the index rose 3.4 percent yesterday after the U.S. economy grew in the third quarter at the fastest pace in a year as gains in consumer spending and business investment helped support a recovery on the brink of faltering. Household purchases, the biggest part of the economy, rose at a 2.4 percent pace, beating estimates.

Japan’s Nikkei 225 Stock Average added 1.4 percent and South Korea’s Kospi Index advanced 0.8 percent. Australia’s S&P/ASX 200 was little changed. Hong Kong’s Hang Seng Index (HSI) climbed 1.9 percent, headed for an 11 percent increase this week, its biggest such advance since May 2009.

The number of contracts to buy previously owned U.S. homes unexpectedly fell in September as lower prices and borrowing costs failed to support demand. A separate report showed fewer Americans filed applications for unemployment assistance last week, while those on benefit rolls dropped to a three-year low, signaling limited improvement in the labor market.

“It’s not an economic scenario at this stage that the U.S. will go into a recession,” saidTim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “The market has been pricing in less macro-economic risks as a result of what happened over the last 24 hours.”
Honda, Hyundai

Asian exporters advanced. Honda added 4.6 percent to 2,504 yen. Hyundai Motor Co. (005380), South Korea’s biggest carmaker by market value, rose 2.9 percent to 230,000 won. Li & Fung Ltd. (494), a supplier of toys and clothes to Wal-Mart Stores Inc., rose 4.9 percent to HK$15.48. Nintendo Co., Japan’s maker of video-game players that gets 39 percent of its sales in the Americas, rose 5.3 percent to 11,700 yen.

Global stocks rallied yesterday after European leaders talked bondholders into accepting 50 percent writedowns on Greek debt and boosted their rescue fund’s capacity to 1 trillion euros ($1.4 trillion) in a crisis-fighting package intended to shield the euro area.

Banks rose. Industrial & Commercial Bank of China (601398) rose 1.8 percent to HK$5.01. HSBC Holdings Plc (HSBA), Europe’s biggest lender, rose 2.5 percent to HK$69. Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second-biggest lender, rose 2.4 percent to 2,288 yen.
Mining Companies

The MSCI Asia Pacific Index declined 11 percent this year through yesterday, compared with a 2.1 percent gain by the S&P 500 and a 9.6 percent drop by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.6 times estimated earnings on average, compared with 12.9 times for the S&P 500 and 10.8 times for the Stoxx 600.

Mining companies advanced after copper in London jumped as much as 1.4 percent to $8,260 a metric ton, poised for the biggest weekly gain since at least 1986. Three-month copper on the London Metal Exchange has gained more than 15 percent this week. BHP Billiton Ltd. (BHP), Australia’s No. 1 mining company, added 1 percent to A$38.73. Jiangxi Copper rose 2.4 percent to HK$20.25. (Bloomberg)


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