Asian stocks advanced for a second straight day as investor appetite for riskier assets rose on speculation Europe's debt crisis won't derail global growth.
Canon, which receives 31 per cent of its sales from Europe, gained 2.5 per cent in Tokyo after the European Central Bank raised its euro-region economic growth forecast for this year. Samsung increased 2.2 per cent in Seoul after an industry group forecast chip sales to rise. BHP Billiton, the world's biggest mining company, jumped 2 per cent after commodity prices advanced yesterday.
The MSCI Asia Pacific Index rose 1.4 per cent to 112.55 in Tokyo, paring its drop this week to 0.8 per cent. The gauge has retreated 13 per cent from this year's high on April 15 on concern debt problems in Europe and Chinese measures to curb property prices will hurt global growth. The gauge's stocks are trading near the cheapest levels in 18 months.
''Perhaps people have been too pessimistic in estimating the impact of the European debt crisis on global growth,'' said Tim Schroeders, who helps manage about $US1.1 billion at Pengana Capital in Melbourne. ''Overall the signs are encouraging. Investors generally are prepared to take more risk today.''
Japan's Nikkei 225 Stock Average advanced 2 per cent while Australia's S&P/ASX 200 Index increased 1.3 per cent. South Korea's Kospi Index gained 0.9 per cent. China's Shanghai Composite Index rose 0.5 per cent and Hong Kong's Hang Seng Index gained 1.2 per cent after government reports showed Chinese industrial output, retail sales and fixed-asset investment climbed.
ECB projections
Futures on the Standard & Poor's 500 Index lost 0.2 per cent. The gauge gained 3 per cent yesterday as economic reports from China, Japan and Australia boosted optimism about growth worldwide.
The ECB yesterday raised its euro-region growth forecast for this year and cut it for 2011. The central bank expects the economy will expand around 1 per cent this year compared with a previous forecast of around 0.8 per cent. It will grow about 1.2 per cent in 2011, lower than an earlier projection of around 1.5 per cent because of weaker domestic demand, European Central Bank president Jean-Claude Trichet said.
Canon, which counts Europe as its biggest market, gained 2.5 per cent to 3735 yen in Tokyo. Fanuc, a maker of industrial robots that got 17 per cent of its revenue in Europe in its last fiscal year, rose 2.2 per cent to 10,450 yen.
Japanese exporters also rose as the euro strengthened to as much as 111.28 yen today from as low as 108.98 yesterday, boosting the value of sales from the region when repatriated. The euro traded near a one-week high against the dollar.
Commodity prices
Samsung, which receives 24 per cent of its revenue from Europe, advanced 2.2 per cent to 790,000 won. Elpida Memory gained 1.6 per cent to 1726 yen in Tokyo.
Chip-related stocks climbed after the Semiconductor Industry Association raised its forecast for global microchip sales this year to 28 per cent, up from a November forecast of 10 per cent growth. China, India and other emerging markets are fueling demand for semiconductors, the association said.
Taiwan Semiconductor Manufacturing's chairman Morris Chang said the European crisis has had a limited impact on the chip industry, the Central News Agency reported yesterday. TSMC shares climbed 1.4 per cent to NT$60.20 after the company reported a 38 per cent jump in May revenue from a year earlier.
''People are now optimistic about the global economy,'' said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings. ''Investors who had avoided risk assets have started buying them.''
Growth hopes
Optimism over economic growth has put the MSCI Asia Pacific Index on course for its highest close since June 4. Government reports yesterday showed Australian employers hired more people in May than economists predicted, while Japan's economy grew faster than estimated in the three months ended March 31.
The slide in the MSCI Asia Pacific Index since April has dragged the price of stocks in the gauge to 14.4 times estimated earnings on average, near the lowest level since January 2009.
''Valuations are looking attractive following recent declines,'' said Monika Yang, who helps oversee $US2 billion at Hamon Asset Management in Hong Kong. ''Investors are waiting to see how earnings will pan out later this year.''
In Taipei, Hon Hai Precision Industry, the maker of Apple iPhones, advanced 2.1 per cent to NT$120 after the company said May revenue surged 78 per cent from a year earlier.
Bond risk declines
A gauge of raw-materials producers rose 1.6 per cent, the second-biggest advance of the MSCI Asia Pacific Index's 10 industry groups after technology. The London Metal Exchange Index of six metals including copper and zinc rose 0.9 per cent yesterday to the highest since June 3. Crude oil for July delivery rose 1.5 per cent in New York yesterday, the highest level in four weeks.
BHP Billiton increased 2 per cent to $38.36 in Sydney. Mitsubishi, which gets about 40 per cent of sales from commodities, added 0.4 per cent to 1893 yen in Tokyo. Posco, Asia's third-biggest steelmaker, advanced 2.2 per cent to 458,500 won in Seoul.
Financial shares were the biggest contributor to the MSCI Asia Pacific Index's gain today as the cost of protecting Asia-Pacific corporate and sovereign bonds from default declined. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan fell 9 basis points to 142 basis points.
Mitsubishi UFJ Financial Group, Japan's biggest bank by market value, which increased 3.4 per cent to 430 yen. Commonwealth Bank of Australia, the country's largest lender, gained 1.7 per cent to $52.24 in Sydney and Westpac, Australia's second-biggest lender, rose 2.3 per cent to $23.15.