Asian Stocks Gain as Investors Weigh Company Earnings, U.S. Data

Feb 06, 2014 7:23 am ET

Feb. 6 (Bloomberg) -- Asian stocks rose, with the regional benchmark index posting its first back-to-back gain in two weeks, as investors weighed earnings and U.S. data showing service-industries growth against a private jobs report that missed estimates.

Mazda Motor Corp. gained 4.3 percent in Tokyo after the carmaker raised its full-year net-income forecast. Sands China Ltd., a unit of billionaire Sheldon Adelson’s Las Vegas gaming company, jumped 11 percent in Hong Kong, leading a rebound for Macau casino operators. Naver Corp., a provider of web portal services, surged 7.3 percent in Seoul after its fourth-quarter operating profit beat estimates.

The MSCI Asia Pacific Index added 0.5 percent to 131.72 as of 8:23 p.m. in Hong Kong. Eight of the 10 industry groups climbed, led by telecommunication and energy companies. The gauge has advanced for two days since closing at a five-month low on Feb. 4.

“Earnings reports have been good so far, so there’s nothing overall to be alarmed about,” said Tim Schroeders, a portfolio manager who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Markets overall will be in a holding pattern until we see non-farm payrolls data on Friday night.”

U.S. companies added 175,000 jobs in January, the smallest increase in five months, a report from ADP Research Institute in Roseland, New Jersey showed yesterday. A separate report showed a gauge of service industries advanced more than forecast. The U.S. government is scheduled to release jobs data tomorrow.

Regional Gauges

Japan’s Topix index was little changed. South Korea’s Kospi index added 0.9 percent. Australia’s S&P/ASX 200 Index climbed 1.2 percent as data showed retail sales rose 0.5 percent in December from a month earlier and the nation unexpectedly posted a trade surplus.

Hong Kong’s Hang Seng Index advanced 0.7 percent and the Hang Seng China Enterprises Index of mainland shares traded in Hong Kong added 0.7 percent. Taiwan’s Taiex Index gained 0.6 percent. Singapore’s Straits Times Index rose 1 percent. Markets in New Zealand and China were closed for holidays.

The MSCI Asia-Pacific gauge plunged 4.6 percent in January for its worst start to a year since 2009 as the Federal Reserve’s stimulus cuts and concern about China’s economic slowdown and volatility in developing markets spurred a global rout. About $3 trillion has been wiped from the value of stocks worldwide this year.

‘Old-Fashioned Correction’

BlackRock Inc. Chief Executive Officer Laurence D. Fink, whose firm oversees $4.3 trillion in assets, said yesterday that the decline is a temporary setback as opposed to a departure from current economic growth.

“I look at this as a good old-fashioned correction,” Fink said during an interview with Erik Schatzker and Stephanie Ruhle on Bloomberg Television’s “Market Makers.”

Futures on the Standard & Poor’s 500 Index added 0.4 percent today. The underlying equity measure lost 0.2 percent yesterday.

The Labor Department may report tomorrow that businesses added 183,000 employees in January after a 74,000 increase in December, according to the median forecast of economists surveyed by Bloomberg.

Of the 274 companies on the MSCI Asia Pacific Index that have reported quarterly earnings since the beginning of January and for which estimates are available, 51 percent beat analyst estimates for profit, according to data compiled by Bloomberg.

Profit Forecast

Mazda rose 4.3 percent to 485 yen after the carmaker raised its full-year net-income forecast by 10 percent to 110 billion yen ($1.1 billion). The price target for the shares was raised to 630 yen from 600 yen at Nomura Holdings Inc.

Nippon Paper Industries Co., Japan’s second-biggest paper company, jumped 7.8 percent to 1,921 yen after reporting nine- month net income that almost reached its full-year profit target.

Sands China soared 11 percent to HK$60.60, rising the most since Oct. 6, 2011. Galaxy Entertainment Group Ltd., the Macau casino operator controlled by billionaire Lui Che-woo, jumped 7.3 percent to HK$71.10. The two stocks each tumbled more than 7 percent yesterday.

Naver surged 7.3 percent to 739,000 won after saying its fourth-quarter operating profit was 154.3 billion won. Analysts had expected 139.9 billion won.

The Asia-Pacific gauge trades at 12.4 times estimated earnings, compared with 14.8 for the S&P 500 and 13.7 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

--Editors: Sarah McDonald, Tom Redmond