Asian Stocks Rise to Six-Month High on China Manufacturing Data

Jun 02, 2014 7:57 am ET

June 2 (Bloomberg) -- Asian stocks rose to a six-month high after a gauge of China’s manufacturing expanded at the fastest pace in five months and policymakers said they will cut the reserve requirement ratio for some lenders.

Karoon Gas Australia Ltd. surged 43 percent in Sydney after saying it will sell energy permits to Origin Energy Ltd. for the Browse Basin off Australia’s west coast. Makita Corp. led industrial shares higher, rising 5.4 percent in Tokyo. Dai-ichi Life Insurance Co. led losses on the regional benchmark index after the Nikkei newspaper reported the Japanese firm is preparing to buy Protective Life Corp. for more than 500 billion yen ($4.9 billion) to expand in the U.S.

The MSCI Asia Pacific Index gained 0.5 percent to 142.51 as of 8:56 p.m. in Tokyo, its highest close since Nov. 19. More than three stocks rose for each that fell on the gauge. Markets in China, Hong Kong, Taiwan and New Zealand were closed today for holidays.

“Policy fine-tuning announcements in China continue to mount up, adding to confidence that growth will be supported around 7.5 percent this year,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees about $133 billion. “More easing measures are likely.”

Japan’s Topix index advanced 1.6 percent as the yen fell and data showed capital investment by companies jumped by 7.4 percent in the three months through March from a year earlier. Makita climbed 5.4 percent to 5,850 yen.

South Korea’s Kospi index rose 0.4 percent and Australia’s S&P/ASX 200 Index gained 0.5 percent, while Singapore’s Straits Times Index added 0.2 percent. Thailand’s SET Index rose 1.8 percent and India’s BSE S&P Sensex Index advanced 1.9 percent.

Chinese Manufacturing

China’s Purchasing Managers’ Index rose to 50.8 in May, the National Bureau of Statistics and China Federation of Logistics & Purchasing said yesterday in Beijing, the highest level since December and topping the median economist estimate in a Bloomberg survey. Readings above 50 indicate expansion in factory output. Authorities reduced some lenders’ reserve requirement ratios in the government’s latest step to support growth in the world’s second-biggest economy.

Forecasts for a rebound in U.S. growth in the second quarter and stimulus from central banks in Japan, Europe and China, along with higher-than-estimated corporate earnings, helped drive the value of global shares to a record $64 trillion last week.

China’s economy is projected to grow 7.3 percent this year, which would be the weakest pace since 1990, according to an analysts’ survey in May. Expansion slowed to 7.4 percent in the first quarter from a year earlier, compared with 7.7 percent in the previous period. The official target for expansion is 7.5 percent.

Thailand Protests

In Thailand, the ruling junta deployed thousands of soldiers in central Bangkok yesterday to counter protests from groups opposed to the May 22 coup, two days after its leader General Prayuth Chan-Ocha called for unity.

Futures on the Standard & Poor’s 500 Index added less than 0.1 percent today after the equity measure last week climbed to a record 1,923.57 as utility and consumer-staple shares rallied and investors weighed data showing an uneven recovery in the U.S. economy.

The S&P 500 traded at 16.3 times estimated earnings, compared with 13.1 for the MSCI Asia Pacific Index and 15.4 on the Europe Stoxx 600 Index, according to data compiled by Bloomberg.

Gas Sale

Karoon Gas soared 43 percent to A$3.51, the biggest gain in more than five years. Origin Energy, Australia’s largest energy retailer, agreed to buy Karoon Gas’s stake in the natural gas project off Western Australia for about $800 million to tap exports to Asia. Origin sank 3.6 percent to A$14.55.

Dai-ichi Life fell 5 percent to 1,433 yen. Final talks on price and terms to buy Protective Life may lead to a deal within days that ranks as the biggest overseas takeover by a Japanese life insurer, the Nikkei said in an English-language version of its article, without saying where it got the information.

Tiger Airways Holdings Ltd. dropped 7.6 percent to 49 Singapore cents. The unprofitable low-fare carrier part owned by Singapore Airlines Ltd. said it is considering fundraising to boost liquidity.