Asian stocks advanced for the first time in three days after Citigroup reported profit that exceeded analysts' estimates, boosting the outlook for corporate earnings.
Mitsubishi UFJ Financial Group, Japan's No. 1 lender, gained 1.3 per cent. Westpac, Australia's second- biggest bank, rose 1 per cent. Nintendo, the world's largest maker of video-game players, climbed 1.3 per cent after JPMorgan Chase recommended investors buy the stock. Wintek, a supplier of touch screens for Apple's iPhones and iPads, fell 3.8 per cent after Apple forecast profit for the current quarter that missed analyst estimates.
“Market sentiment is improving,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities. “Expectations for corporate earnings in the financial sector are rising after the better-than-expected results at Citigroup.”
Two stocks rose for each that fell on the MSCI Asia Pacific Index, which gained 0.2 per cent to 130.65 in Tokyo. The measure completed its seventh weekly advance last week, the longest winning streak since 2006, on speculation corporate profits will weather Europe's debt crisis, Chinese steps to curb property-price inflation and concern about the pace of the US economic rebound.
Japan's Nikkei 225 Stock Average gained 0.5 per cent. China's Shanghai Composite Index rose 0.1 per cent, while Hong Kong's Hang Seng Index increased 0.6 per cent. Australia's S&P/ASX 200 Index climbed 0.5 per cent.
Nasdaq futures tumble
Futures on the Standard & Poor's 500 Index slid 0.4 per cent. Futures on the Nasdaq 100 Index declined 1.3 per cent after Apple, which makes up 21 per cent of the gauge by weight, forecast profit for the current quarter that missed estimates.
The S&P 500 rose 0.7 per cent yesterday in New York to the highest level since May 3 following Citigroup's results and as an unexpected drop in US industrial production added to signs the Federal Reserve will help fuel the economic recovery.
Output at factories, mines and utilities fell 0.2 per cent in September, according to figures from the Fed, the first decline since the recession ended in June 2009.
Westpac gained 1 per cent to $22.86 in Sydney. ANZ, Australia's third biggest lender by market value, gained 1 per cent to $23.81. Mitsubishi UFJ increased 1.3 per cent to 387 yen. Sumitomo Mitsui Financial Group, Japan's second-largest bank, advanced 0.4 per cent to 2369 yen.
Mizuho, energy stocks
Mizuho Financial Group, Japan's third-largest bank by market value, gained 1.7 per cent to 119 yen. The company plans to increase credit to clients elsewhere in Asia as domestic demand declines, Hiroshi Yamamoto, general manager of the syndicated finance division at Mizuho Corporate Bank, said.
The MSCI Asia Pacific Index has risen 8.4 per cent this year as government and industry reports from the US and China fueled confidence in the global economic recovery. Stocks on the gauge trade at 14.3 times estimated profit on average, compared with 14.1 times for the S&P 500 and 12.3 times for the Stoxx Europe 600 Index.
Energy stocks posted the biggest advance among the 10 industry groups in the MSCI Asia Pacific Index as oil traded near its highest in almost two weeks. Woodside Petroleum, Australia's second-biggest oil producer, gained 1.1 per cent to $44.40. Cnooc, China's biggest offshore oil explorer, rose 1 per cent to HK$16.32 in Hong Kong.
Nintendo rose 1.3 per cent to 21,110. JPMorgan Chase rated the stock a “buy” in new coverage with a 12-month share-price forecast of 27,000 yen.
Apple suppliers
STX Pan Ocean, South Korea's biggest bulk carrier, advanced 3.6 per cent to 12,850 won. The company said it expects about $US5 billion of revenue from a 25-year contract received from Fibria Celulose of Brazil.
Among stocks that declined, Wintek dropped 3.8 per cent to NT$51.4, leading Apple suppliers lower. Genius Electronic Optical, a camera lens maker, lost 2.8 per cent to NT$156.5.
Apple, the world's third largest company by market value, said profit for the current period, which includes the yearend holiday shopping season, will be about $4.80 a share, compared with a $5.03 estimate by 36 analysts surveyed by Bloomberg. It's exceeded projections every quarter since at least the April-to- June period in 2005, according to data compiled by Bloomberg.