Asian stocks advanced, paring the regional benchmark index's third consecutive weekly decline, as exporters gained after reports showed US jobless claims fell even as manufacturing growth slowed.
HTC Corp., the Taiwanese smartphone maker that gets about half of its sales in America, rose 1.3 per cent in Taipei. Hyundai Motor Co., South Korea's No. 1 carmaker, climbed 3 per cent. Hitachi Ltd., an electronics and power-equipment maker that derives 40 per cent of its revenue abroad, gained 1.7 per cent in Tokyo as the yen depreciated, boosting the outlook for overseas earnings. BHP Billiton Ltd., the world's biggest mining company, fell 1.6 per cent after oil and metal futures dropped yesterday.
“We're seeing a bit of a bounce today as the market may have become oversold amid selling in the past three weeks,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd., which manages $98 billion in Sydney. “The soft patch of economic data from the US, along with tightening concerns in China, the recession in Japan and Europe's debt crisis will leave a volatile environment for the market in the next few months.”
The MSCI Asia Pacific Index rose 0.2 per cent to 134.98 as of 1 p.m. in Tokyo, after swinging between gains and losses at least five times. About the same number of stocks advanced and declined in the gauge, which is heading for its longest streak of weekly declines since November.
China inflation
The regional benchmark index last week recorded its second straight weekly drop amid concern that China's anti-inflation policies may slow global economic growth and as the US Federal Reserve prepares to end a $US600 billion asset-purchase program known as quantitative easing.
Japan's Nikkei 225 Stock Average gained 0.3 per cent, erasing earlier losses, after the Bank of Japan's policy board unanimously voted to maintain monetary policy even after a report yesterday showed the country slipped into a recession following a record earthquake in March.
South Korea's Kospi Index advanced 0.7 per cent. China's Shanghai Composite Index and Hong Kong's Hang Seng Index both gained 0.1 per cent. Taiwan's Taiex Index lost 0.3 per cent. Australia's S&P/ASX 200 Index dropped 0.4 per cent.
Futures on the Standard & Poor's 500 Index were little changed today. In New York, the index advanced 0.2 per cent to 1,343.60 yesterday after a government report showing a bigger- than-forecast drop in jobless claims last week bolstered optimism about the economic recovery.
Best performer
HTC increased 1.3 per cent to $NT1,215 in Taipei. Hyundai Motor, which gets about 13 per cent of its sales from North America, advanced 3 per cent to 240,500 won in Seoul. Brambles Ltd., the world's biggest supplier of wooden pallets, added 1.1 per cent to $7.35 in Sydney.
Giant Manufacturing Co., a Taiwanese bicycle maker that receives 39 per cent of sales from the Americas, climbed 6.7 per cent to $NT105 in Taipei, the best performer on the MSCI Asia Pacific Index. UBS AG raised its rating on the stock to “buy” from “neutral,” saying a recent selloff was “overdone.”
Hana Financial Group Inc., South Korea's fourth-largest bank, jumped 4.8 per cent to 38,500 won in Seoul after the Korea Times reported the company agreed with Lone Star Funds to extend the May 24 deadline for Hana's purchase of a controlling stake in Korea Exchange Bank.
Manufacturing growth in the Philadelphia region unexpectedly eased in May to the slowest pace in seven months, a sign the US economy may get less of a boost from the industry that led it out of its last recession. Another report showed sales of existing homes unexpectedly declined in April, indicating the industry is struggling to gain traction as the economy expands.
'Investors are wary'
“Expectations for the US economic outlook are slightly decreasing and there's a mood investors are wary of buying stocks,” said Norikazu Kitta, a strategist at Tokyo-based Nikko Cordial Securities Inc. “However, the stable yen and gains in US stocks are positive for the market.”
Japanese exporters gained after the yen depreciated. The yen fell to as low as 117.24 against the euro, compared with 116.48 at the close of stock trading in Tokyo yesterday. Against the dollar, Japan's currency weakened to as low as 82.23 from 81.68. A lower yen boosts the value of overseas income at Japanese companies when converted into their home currency.
Hitachi advanced 1.7 per cent to 468 yen. Toshiba Corp., the world's second-largest maker of flash memory chips, increased 1.6 per cent to 438 yen. TDK Corp., an electronics manufacturer that derives more than 80 per cent of its revenue abroad, climbed 2.7 per cent to 4,335 yen, the most on the Nikkei 225.
Oil, metals
Among stocks that fell, BHP dropped 1.6 per cent to $44.09. Rio Tinto Ltd., the world's second-largest mining company by sales, slipped 1.4 per cent to $79.97. Aluminum Corp. of China Ltd., the nation's No. 1 producer of the lightweight metal, sank 2 per cent to HK$6.81 in Hong Kong. Inpex Corp., Japan's biggest energy explorer, declined 1.3 per cent to 547,000 yen.
Crude oil for June delivery tumbled 1.7 per cent to $US98.44 a barrel in New York yesterday. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum declined 1.7 per cent yesterday.
The MSCI Asia Pacific Index lost 2.2 per cent this year through yesterday, compared with gains of 6.8 per cent by the S&P 500 and 1.5 per cent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.5 times estimated earnings on average, compared with 13.6 times for the S&P 500 and 11.2 times for the Stoxx 600.