Asian stocks rose, lifting the MSCI Asia Pacific Index to a nine-month high, after Australia's treasurer said the worst of the global recession may have passed and Goldman Sachs raised its estimate for the US Standard & Poor's 500 Index.
Fairfax Media, Australia's No. 2 newspaper owner, surged 6.3 per cent, while James Hardie Industries, the biggest seller of home siding in the US, climbed 6.5 per cent in Sydney. Mitsubishi, a Japanese trading company that gets more than half its revenue from resources, jumped 4.7 per cent as oil and metals prices advanced.
``I think the recession is clearly over. Confidence is back,'' Chong Yoon Chou, Singapore-based investment director at Aberdeen Asset Management Asia, which has $US27 billion of assets, said in an interview. ``What we've seen in the last quarter is that things are getting started again and orders are coming back.''
The MSCI Asia Pacific Index added 1.3 per cent to 106.12 in Tokyo, headed for a sixth gain and the highest close since Oct. 2. The gauge has climbed 50 per cent from a five-year low on March 9 amid optimism stimulus policies worldwide will revive the global economy.
The Nikkei 225 Stock Average climbed 1.4 per cent in Japan, where stock markets were closed yesterday, while South Korea's Kospi Index rose 0.5 per cent.
New Zealand's NZX 50 Index advanced 1.6 per cent. Sky City Entertainment Group, the country's biggest casino operator, surged 7.3 per cent after saying annual profit more than doubled.
CIT financing
Australia's S&P/ASX Index was little changed. Harvey Norman Holdings, the nation's largest electronics retailer, sank 6.6 per cent, the sharpest decline on the MSCI World Index, after reporting sales growth that missed analyst estimates.
Neptune Orient Lines, Southeast Asia's biggest container carrier, sank 1.8 per cent in Singapore on lower freight rates.
Futures on the S&P 500 dipped 0.4 per cent. The gauge climbed 1.1 per cent in New York yesterday. Shares of CIT Group, which provides financing to almost 1 million small businesses, soared 79 per cent after a person briefed on the board's deliberations said the lender has reached a financing agreement with bondholders.
Fairfax surged 6.3 per cent to $1.35 in Sydney, and rival West Australian Newspapers Holdings jumped 9.4 per cent to $5.35. Treasurer Wayne Swan told reporters today that the worst of the global recession ``may be behind us.''
S&P 500 target
James Hardie, which gets more than three-quarters of its revenue in the US, surged 6.5 per cent to $4.62 in Sydney.
Komatsu, a construction-machinery maker that gets a quarter of its sales from the Americas, climbed 4.3 per cent to 1,470 yen in Tokyo. Honda Motor, Japan's No. 2 automaker, rose 2.2 per cent to 2,530 yen after saying it will increase overtime at two plants in the country to meet demand.
David Kostin, Goldman Sachs' US strategist, boosted his year-end estimate for the S&P 500 to 1,060 from 940, citing earnings reports that have been stronger than expected. The gauge closed at 951.13 yesterday.
The move mirrored similar upgrades in Asia. Morgan Stanley raised its estimate for the Kospi index by 23 per cent yesterday. Citic Securities, China's largest brokerage by market value, boosted its 2009 earnings growth estimate for companies listed in the country to 14 per cent from an earlier 9 per cent.
The MSCI Asia Pacific Index last week had its biggest weekly advance since May as Intel forecast sales that beat analyst estimates and IBM raised its profit target. Government reports showed economic growth accelerated in China and US manufacturing improved.
Relief rally
``The earnings recovery of US companies is following a familiar pattern of conservative guidance being beaten and giving rise to a relief rally,'' said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo, which manages $US28 billion.
The MSCI Asia Pacific Index's rally has lifted average valuations of shares in the benchmark gauge to 24 times estimated earnings, and 1.5 times book value, up from 14 times and 1.2 times respectively at the start of the year.
Japan's Topix index gained 1.7 per cent, led by trading companies and metals producers. Mitsubishi, the nation's largest trading house by market value, added 4.7 per cent to 1,780 yen, and Sumitomo Metal Mining, Japan's top nickel producer, leapt 6.3 per cent to 1,360 yen.
A gauge of six metals in London climbed for a sixth session yesterday, the longest stretch since March 2006, while crude oil rose for a fifth day today.
Sky City
Sky City Entertainment climbed 7.3 per cent to $NZ3.07. Net income was as much as $NZ116 million for the year ended June 30 from $NZ49.9 million a year earlier when the company took a charge against its cinema unit, the company said.
The result exceeded forecasts in April, when Sky City said it expected net income to be within a range of $NZ99 million to $NZ106 million.
Shipping lines fell on concern falling rates will reduce their earnings. The Baltic Dry Index, a measure of shipping costs for commodities, declined for the first time in five sessions yesterday.
Neptune Orient sank 1.2 per cent to S$1.65 in Singapore. STX Pan Ocean, South Korea's top bulk carrier, slid 1.3 per cent and Hyundai Merchant Marine lost 1 per cent.
Harvey Norman sank 6.3 per cent to $3.25. Total sales increased 4.5 per cent to $1.49 billion in the three months ended June, the company said. Revenue from stores open at least a year rose 2 per cent, missing the 5 per cent median estimate of analysts in a Bloomberg News survey.
