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Asian Stocks Swing Between Gains, Losses as Japan Rallies

Published: January 24, 2013 | 7:28 am
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Asian stocks swung between gains and losses as Japanese shares rallied on a weaker yen, China’s manufacturing beat estimates and North Korea threatened a nuclear test. Apple Inc. (AAPL) suppliers fell after the company reported its weakest sales since 2009.
Toyota Motor Corp., the world’s biggest automaker, rose 2.2 percent in Tokyo. AAC Technologies Holdings Inc., which makes speakers for Apple, dropped 6 percent in Hong Kong. Tata Motors Ltd. retreated 7.8 percent in Mumbai after the Indian automaker’s Jaguar Land Rover Plc unit said profit growth probably stalled in the fiscal third quarter.
The MSCI Asia Pacific Index slid 0.1 percent to 131.90 as of 3:05 p.m. in Tokyo, after gaining as much as 0.1 percent and falling 0.4 percent. About the same number of stocks rose as advanced. The gauge jumped 10 percent through yesterday from Nov. 14, when elections were announced in Japan, spurring a rally in the country’s shares amid speculation the new government would take necessary steps to end deflation.
“The China manufacturing data was fantastic and more confirmation that the Chinese economic recovery is on track,” said Shane Oliver, Sydney-based head of strategy at AMP Capital Investors Ltd., which has about $126 billion under management. “It’s good for Chinese growth, Asian regional growth, and the global economy given the contribution China makes to global growth. But the question is whether that’s fully priced into stocks or not.”
Shares in Asia reversed or pared gains after the official Korean Central News Agency said North Korea will conduct a nuclear test “targeted” at the U.S. after the Obama administration pushed through additional sanctions at the United Nations.
Relative Value
The MSCI Asia Pacific Index, the benchmark regional equities gauge, traded at 14.2 times average estimated earnings compared with 13.5 for the Standard & Poor’s 500 Index and 12.2 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Hong Kong’s Hang Seng Index fell 0.3 percent. China’s Shanghai Composite Index (SHCOMP) retreated 1.1 percent after tthe gauge jumped as much as 1.8 percent earlier as a private survey of companies showed China’s manufacturing is expanding at the fastest rate in two years.
The preliminary reading of a Purchasing Managers’ Index was 51.9 in January, according to a statement from HSBC Holdings Plc and Markit Economics today. That compares with the 51.5 final reading for December and the 51.7 median estimate of 17 analysts surveyed by Bloomberg News. A reading above 50 indicates expansion.
Yen Weakens
Japan’s Nikkei 225 Stock Average climbed 1.3 percent even after a report showed the nation’s December exports dropped 5.8 percent from a year earlier. The nation’s currency weakened, snapping a three-day advance against the dollar that saw the equity benchmark yesterday cap its longest losing streak in two months.
The yen extended losses after Japan’s Deputy Economy Minister Yasutoshi Nishimura said its correction from high levels “isn’t over yet.” A weaker yen boosts overseas income at Japanese companies when converted into their home currency.
Korea GDP
Australia’s S&P/ASX 200 Index (AS51) advanced 0.5 percent. South Korea’s Kospi Index lost 0.8 percent after a report showed the economy expanded less than analysts estimated in the fourth quarter. Taiwan’s Taiex Index dropped 0.4 percent.
Futures on the Standard & Poor’s 500 Index fell 0.3 percent today. The S&P 500 Index (SPX) yesterday closed at the highest level in five years as lawmakers voted to temporarily suspend the federal debt limit, and Google Inc. and International Business Machines Corp. shares rallied amid better-than-forecast earnings.
After the close of U.S. markets, Apple reported its slowest profit expansion since 2003 and weakest sales increase in 14 quarters amid rising costs and accelerating competition with Samsung Electronics Co. The results reinforce investor concerns about Apple’s growth, with the stock falling 27 percent since September.

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