Asian stocks rose, sending the regional equity benchmark to its highest since July 2008, as strengthening economic and corporate earnings data boosted confidence in a global recovery.
BHP Billiton, the world's largest mining company and Australia's biggest oil producer, advanced 1.8 per cent in Sydney as oil and metal prices gained, while rival Rio Tinto Group surged 3.2 per cent. Toyota, a carmaker that gets more than 70 per cent of its sales overseas, increased 2.1 per cent. Yahoo Japan, operator of Japan's most-visited Internet portal, jumped 4.8 per cent amid speculation AOL Inc. is among companies exploring a deal for part-owner Yahoo! Inc.
The MSCI Asia Pacific Index advanced 1.4 per cent to 131.44 in Tokyo, with all 10 industry groups rising. About seven stocks rose for each that fell on the nearly 1000-member gauge, as investors viewed a record climb in China's foreign-currency reserves as a sign that global demand remains resilient
“The positive tone of recent economic and earnings releases is generating a growing momentum of confidence,” said Tim Schroeders, who helps manage about $US1 billion at Pengana Capital in Melbourne. “Asian markets are attractive because investors are increasingly looking to faster-growing economies that are less reliant on policy stimulus to achieve adequate rates of return.”
Central banks
The MSCI Asia Pacific Index has climbed 4.2 per cent this month on speculation that central banks around the world will increase efforts to boost economic growth.
Japan's Nikkei 225 Stock Average advanced 1.9 per cent today. Australia's S&P/ASX 200 Index gained 1.6 per cent, while New Zealand's NZX 50 Index gained 0.8 per cent in Wellington.
Futures on the Standard & Poor's 500 Index climbed 0.8 per cent today, the most in almost two weeks. The index rose 0.7 per cent yesterday in New York to the highest close since May 3. CSX, the second-largest publicly traded U.S. railroad, reported profit that exceeded analysts' estimates, and China said its foreign-exchange reserves increased by a record to $US2.65 trillion at the end of September.
Eighteen companies in the S&P 500 are scheduled to release third-quarter results this week. Analysts surveyed by Bloomberg predict 23 per cent profit growth from a year earlier for companies in the index, the fourth straight quarterly increase after a record nine-quarter slump.
The MSCI Asia Pacific Index rose 0.7 per cent yesterday, the biggest gain in a week, as reports from China, Japan and Australia also indicated the economic recovery is strengthening.
'Major source'
The Asia Pacific gauge has advanced 9.3 per cent in 2010, compared with gains of 5.7 per cent by the S&P 500 and 4.9 per cent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at an average of 14.4 times estimated earnings, compared with 14 times for the S&P and 12.3 times for the Stoxx.
“China, which is a major source of demand, is unexpectedly good,” said Mitsushige Akino, who oversees about $US450 million in assets in Tokyo at Ichiyoshi Investment Management Co. “Global economic sentiment is moderately recovering and excessive pessimism is receding.”
Crude oil for November delivery rose 1.6 per cent to settle at $US83.01 a barrel yesterday in New York, the highest level since Oct. 6. The London Metal Exchange Index of six metals including aluminum and copper advanced 0.3 per cent yesterday to the highest close since July 2008. The Baltic Dry Index of shipping rates for commodities rose for a second consecutive day.