Asian Stocks Advance to 4-Month High on U.S. Manufacturing, Yen

May 23, 2014 6:27 am ET

May 23 (Bloomberg) -- Asian stocks rose, with the regional benchmark index reaching its highest level in more than four months, after data showed U.S. manufacturing expanded and as the yen held yesterday’s losses.

Li & Fung Ltd., a supplier of toys and clothes that gets 62 percent of its revenue in the U.S., gained 2.2 percent in Hong Kong. Sunac China Holdings Ltd., a homebuilder partly owned by buyout firm Bain Capital LLC, jumped 8.2 percent in Hong Kong after it agreed to buy a stake in developer Greentown China Holdings Ltd. Takeda Pharmaceutical Co., Asia’s largest drugmaker, added 1.6 percent in Tokyo after it was found not liable for the bladder cancer of two women who used its Actos diabetes medication.

The MSCI Asia Pacific Index added 0.4 percent to 140.81 as of 6:17 p.m. in Hong Kong. Two stocks rose for each that fell on the measure, which has gained 0.8 percent this week.

“Most people view that the U.S. will be the growth engine of the world this year,” said Chris Weston, chief market strategist at IG Markets Ltd. in Melbourne. “If you look at everything on an adjusted basis, the equity market probably continues to be the most compelling place to be in at the moment.”

Japan’s Topix index added 1 percent as the yen was little changed at 101.75 per dollar after falling 0.4 percent yesterday. South Korea’s Kospi index gained 0.1 percent. Australia’s S&P/ASX 200 Index increased 0.2 percent and New Zealand’s NZX 50 Index climbed 0.4 percent.

Regional Gauges

Hong Kong’s Hang Seng Index and the Hang Seng China Enterprises Index of mainland companies traded in the city both added 0.1 percent. Li & Fung climbed 2.2 percent to HK$11.38. The Shanghai Composite Index gained 0.7 percent.

Taiwan’s Taiex index rose 0.4 percent, while Singapore’s Straits Times Index gained 0.4 percent.

Thailand’s SET Index slid 0.6 percent as the nation’s army took control of the country and suspended the constitution after a six-month crisis that has sapped economic growth and caused political paralysis, staging the military’s 12th coup since 1932.

Two days after declaring martial law and saying there was no coup, army chief Prayuth Chan-Ocha announced on national television alongside senior military officials yesterday that he was seizing control to restore peace.

Futures on the Standard & Poor’s 500 Index gained 0.1 percent today. The U.S. measure added 0.2 percent yesterday. The Markit Economics preliminary index of U.S. manufacturing increased to 56.2 in May from 55.4 a month earlier as output accelerated, the London-based group said yesterday. Readings above 50 for the purchasing managers index indicate expansion, and the May figure was the highest in three months.

U.S. Data

Other data showed sales of previously-owned U.S. homes rose in April for the first time in four months while more Americans than projected filed applications for unemployment benefits last week, showing uneven progress in the labor market.

Sunac China jumped 8.2 percent to HK$3.81 in Hong Kong after it agreed to pay HK$6.3 billion ($812 million) for a 24.3 percent stake in Greentown China, which soared 6.6 percent to HK$8.20.

Chinese developers climbed after China Securities Journal reported the government will remove home-purchase restrictions depending on market situations and avoid causing market volatility, citing an unidentified researcher with the housing ministry.

Developers Rise

China Overseas Land & Investment Ltd., the largest mainland developer listed in Hong Kong, rose 5.5 percent to HK$20.00. China Resources Land Ltd. added 3.9 percent to HK$15.34.

Takeda Pharmaceutical gained 1.6 percent to 4,594 yen. A jury in Las Vegas yesterday agreed with the company that Actos didn’t cause the women’s disease, handing Takeda its fifth victory from six cases that have gone to trial over the drug’s alleged link to bladder cancer.

The MSCI Asia Pacific Index lost 0.4 percent this year amid concern China’s economic slowdown is accelerating. The gauge jumped 1.1 percent yesterday as preliminary China manufacturing data beat estimates.

The Asia-Pacific gauge traded at 12.9 times estimated earnings, compared with 16.1 for the S&P 500 and 15.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.