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Asia stocks rise amid strong China data, weak yen

Published: January 18, 2013 | 8:09 am
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LOS ANGELES — Asia markets traded higher Friday, holding their gains as Chinese economic data beat expectations, with Japan surging as the yen touched new multiyear lows.

Japan’s Nikkei Stock Average (TYO:JP:100000018) closed with a hefty 2.9% gain, while Hong Kong’s Hang Seng Index (HSI:HK:HSI) traded 1.1% higher in the afternoon, and Shanghai Composite (SHA:CN:000001) added 1.4%, extending their opening gains late in the session.

Elsewhere in the region Australia’s S&P/ASX 200 index (ASX:AU:XJO) rose 0.3%, Taiwan’s Taiex (TPE:XX:Y9999) jumped 1.5%, Singapore’s Straits Times Index (SIN:SG:STI) added 0.3%, and South Korea’s Kospi (KRX:KR:SEU) gained 0.7%.

The strong performance in Tokyo came the U.S. dollar (ICAPC:USDJPY) was buying ¥90.02 by the end of the stock session, trading around its highest level against the yen since mid-2010. The yen’s losses came amid indications the Bank of Japan will again ease policy at the end of its policy meeting early next Tuesday.

The Nikkei business daily reported Friday that the central bank would add about ¥10 trillion ($110 billion) to its asset-buying program. It would mark the first time the Bank of Japan has eased in two consecutive meetings in more than nine years, according to the Nikkei.

Separately, Japanese Finance Minister Taro Aso said after a meeting with Bank of Japan Gov. Masaaki Shirakawa that the government and central bank had yet to reach a deal over an inflation target.

Reports and some analysts say the Bank of Japan will likely agree to calls for a firm 2% inflation target, up from a soft goal of 1% currently, to help combat deflation.

Currency-sensitive exporters soared following the yen’s losses. Toshiba Corp. (TYO:JP:6502) (OTN:TOSYY) rallied 6.9%, Panasonic Corp. (TYO:JP:6752) (NYSE:PC) improved by 5.3%, Honda Motor Co. (TYO:JP:7267) (NYSE:HMC) finished 3.2% higher, Advantest Corp. (TYO:JP:6857) (NYSE:ATE) climbed 8.2% and Tokyo Electron Ltd. (TYO:JP:8035) (OTN:TOELY) rose 8.4%.

Sony Corp. (TYO:JP:6758) (NYSE:SNE) thundered 12.2% upward, getting an extra boost after announcing it had reached a deal to sell its U.S. headquarters, located on Manhattan’s Madison Ave., for $1.1 billion.

Meanwhile, Chinese shares traded solidly higher, though the above-forecast data had little immediate effect on the gains.

A half-hour into trading, the Chinese statistics bureau announced that fourth-quarter gross domestic product rose 7.9% from a year earlier, beating a 7.8% projection in separate Dow Jones Newswires and Reuters surveys.

Despite the solid numbers, the broader market kept to its levels after the data, with Hong Kong-based market commentator Andrew Sullivan saying the lact of reaction was “partly due to the fact that a lot of retail money is tied up in IPOs, and institutional money is focusing on Japan as the yen weakens.”

Still, separate December data helped support some sectors, as the statistics bureau reported retail sales rising 15.2%, above a Reuters forecast of 14.9%, while industrial output gained 10.3%, just above a 10.1% projection. Read: China economy grows more than expected

Some retailers and major manufacturers enjoyed a strong boost after those numbers, with footwear major Belle International Holdings Ltd. (HKG:HK:1880) (OTN:BELLF) adding 3.5%, auto maker BYD Co. (HKG:HK:1211) (OTN:BYDDF) ahead by 3.1%, clothing retailer Esprit Holdings Ltd. (HKG:HK:330) (OTN:ESHDF) up 1.5%, and computer firm Lenovo Group Ltd. (HKG:HK:992) (OTN:LNVGF) ahead by 1.1%.

Banks traded generally higher in the main Chinese markets. In Hong Kong, Bank of China Ltd. (HKG:HK:3988) (OTN:BACHY) rose 1.6%, while China Minsheng Banking Corp. (HKG:HK:1988) (OTN:CMAKY) surged 3.4% and China Merchants Bank Co. (HKG:HK:3968) (OTN:CIHHF) rose 1.8%.

In Shanghai, Bank of China (SHA:CN:601988) gained 0.7%, China Merchants (SHA:CN:600036) rose 0.8%, and China Minsheng Banking Corp. (SHA:CN:600016) rallied 3.6%.

Over in Australia, mining shares were strong, with Rio Tinto Ltd. (ASX:AU:RIO) (NYSE:RIO) surging 2.7% despite a 0.5% fall for its London shares (LSS:UK:RIO) Thursday.

Late Thursday, Rio Tinto announced a $14 billion writedown against the value of its troubled aluminum division and some Mozambique coal assets, along with the departure of its Chief Executive Officer Tom Albanese. Read: Rio Tinto CEO steps down after $14 billion charge

“We see this news as short-term pain for a long-term gain,” said analysts at IG Markets, in part as they believe the firm’s new CEO will bring “a much stricter and disciplined approach to further investment and capital management.”

Rio’s rival BHP Billiton Ltd. (ASX:AU:BHP) (NYSE:BHP) rose a more modest 0.4%, while iron-ore extractor Fortescue Metals Group Ltd. (ASX:AU:FMG) (OTN:FSUMF) jumped 3.2%, and uranium miner Paladin Energy Ltd. (ASX:AU:PDN) (OTN:PALAF) rallied 2.1%.

In Seoul, financials were among the outperformers, with Hana Financial Group Inc. (KRX:KR:086790) up 2.1% and Woori Finance Holdings Co. (KRX:KR:053000) (NYSE:WF) rising 3.8%.

The gains came after Wall Street made a strong advance overnight, with the S&P 500 index (SNC:SPX) hitting its highest finish since late 2007, thanks to upbeat jobless and housing reports.

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