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20 April 2024

Stocks in Asia rise as recession fears subside

By Agencies



Asian stocks rose, sending the region’s benchmark to a six-week high, as a rally in commodity prices and profit reports at Standard Chartered and Marui Group stoked optimism that earnings would endure a global slowdown.

BHP Billiton gained after crude oil climbed to a record and copper futures rose. Standard Chartered, the London-based bank that makes two-thirds of its profit in Asia, jumped to a three-week high, while Marui, the Japanese department-store operator, surged the most in eight years.

“Some of the bearishness concerning the domestic and global economies is melting away,” said Takashi Miyazaki of Mitsubishi UFJ Asset Management.

The MSCI Asia Pacific Index added 2.1 per cent to 149.28 as of 3.30pm in Tokyo. The benchmark, poised for its highest close since January 15, has rallied 13 per cent since hitting a 14-month low on January 22 as concern eased that a US housing slump would drag the world’s largest economy into a recession.

Japan’s Nikkei 225 Stock Average added 1.5 per cent to 14,031, a seven-week high. Benchmarks advanced in all other markets open for trading, with Hong Kong’s Hang Seng Index posting the biggest gain of 3.4 per cent.

The Standard & Poor’s 500 Index added 0.7 per cent on Tuesday, rounding off its biggest three-day advance of the year. US stocks were boosted after International Business Machines (IBM), the world’s biggest computer-services company, said a $15 billion (Dh55bn) share buyback may boost earnings by five cents a share this year.

BHP, the world’s largest mining company and Australia’s biggest oil producer, rose 2.8 per cent, its biggest gain in two weeks. Santos, Australia’s number three oil and gas explorer, jumped 7.5 per cent.

PetroChina, China’s largest oil producer, added 4.5 per cent.

“The commodities-related shares are being thrust to the forefront today” after oil’s climb, said Hiroichi Nishi, Nikko Cordial Securities equities manager.

Crude oil for April delivery rose to as high as $101.43 a barrel on the New York Mercantile Exchange yesterday, and was recently at $101.22. Copper futures added 0.9 per cent in New York on speculation demand from emerging markets will erode inventories. Meanwhile, gold climbed to a record in Asia yesterday, while wheat rose to a high in Chicago.

Industrial & Commercial Bank of China advanced 4.2 per cent , on course for its highest close since January 10. JPMorgan said the bank, China’s largest, is the “safest exposure to the sector”.

Earnings at Chinese banks this quarter will be “solid” on higher interest, analysts Samuel Chen and Sunil Garg wrote in a report.

Technology shares advanced. Sony, the world’s second-largest maker of consumer electronics, added 2.3 per cent. Hon Hai Precision Industry, the world’s largest contract electronics manufacturer, gained 1.9 per cent.

IBM climbed to a four-month high in New York trading after saying it will earn at least $8.25 a share, following the buyback. (Bloomberg)