Asian Stocks Climb on U.S. Consumer Confidence, Durable Goods

Aug 27, 2014 4:53 am ET

Aug. 27 (Bloomberg) -- Asian stocks rose after U.S. data on durable goods and consumer confidence boosted optimism in the strength of the world’s largest economy.

Boral Ltd. surged 4.5 percent as profit at the Australian producer of building materials topped estimates. Kawasaki Kisen Kaisha Ltd., Japan’s third-biggest shipper, rose 3.3 percent on a report it will target a return on equity of 10 percent in five years. BYD Co., an electric automaker partially owned by Warren Buffett’s Berkshire Hathaway Inc., gained 5.9 percent amid optimism China will provide funding to build electric-vehicle- charging facilities.

The MSCI Asia Pacific Index gained 0.3 percent to 148.73 as of 4:35 p.m. in Hong Kong, with the gauge trading within 1 percent of a six-year high. More than $1.1 trillion has been added to the value of the world’s equities this month, with global shares now worth a record $66 trillion. Orders for U.S. durable goods jumped in July by the most on record, while American consumer confidence reached the highest level in almost seven years.

“The U.S. economy is progressively strengthening,” Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Ltd., which manages about $29 billion, said by e-mail. “Earnings expectations are not challenging, valuations are at average levels, buybacks are continuing and the Fed will maintain its highly supportive monetary policy. U.S. rates are set to remain extremely low for another two years at least.”

Regional Gauges

South Korea’s Kospi index added 0.3 percent and Taiwan’s Taiex index advanced 1 percent. New Zealand’s NZX 50 Index rose 0.9 percent to a record. Singapore’s Straits Times Index added 0.5 percent and India’s S&P BSE Sensex Index increased 0.4 percent. Australia’s S&P/ASX 200 Index increased 0.2 percent as Boral surged 4.5 percent to A$5.63. Japan’s Topix index rose 0.1 percent.

Hong Kong’s Hang Seng Index slipped 0.6 percent while the Hang Seng China Enterprises Index of mainland Chinese firms traded in the city lost 0.5 percent. The Shanghai Composite Index climbed 0.1 percent. The MSCI Emerging Markets Index increased 0.4 percent after closing yesterday at a three-year high.

Futures on the Standard & Poor’s 500 Index added 0.1 percent today after the gauge yesterday closed above 2,000 for the first time.

The MSCI Asia Pacific Index traded at 13.7 times estimated earnings yesterday compared with 16.8 for the S&P 500 and 15.5 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Company Profits

Kawasaki Kisen climbed 3.3 percent to 251 yen in Tokyo. The marine cargo firm said it expects a 10 percent return-on-equity in five years and targeted earnings per share of 40 yen within that same period, double the expected fiscal 2014 figures, the Nikkei newspaper reported, citing an interview with president Jiro Asakura. Also, Credit Suisse Group AG lifted its rating to outperform from underperform.

Innolux Corp., a Taiwanese maker of panel displays for TVs and smartphones, climbed 6.8 percent to NT$15. The company’s third-quarter profit will rise on increasing sales of higher- margin products, including automobile and industrial displays, according to a report in the Economic Daily.

China Oilfield Services Ltd. surged 8.5 percent to HK$21.80 in Hong Kong after posting first-half net income that climbed to 4.4 billion yuan ($716 million), topping the estimate of 3.58 billion yuan forecast by analysts surveyed by Bloomberg.

BYD gained 5.9 percent to HK$53.90. People familiar with the matter said China is considering providing as much as 100 billion yuan ($16 billion) in funding to build electric-vehicle- charging facilities. The support for the electric-car industry forms part of Premier Li Keqiang’s push to rein in pollution in China, the world’s biggest carbon emitter, while moving forward at the same time with goals of urbanizing the country.