Jan. 28 (Bloomberg) — Asian stocks rose for the first time in nine days and the dollar gained on signs profits are recovering and the Federal Reserve will reduce stimulus measures as the U.S. economy recovers. Copper and aluminum slid.
The MSCI Asia Pacific Index gained 1 percent to 119.25 at 1:25 p.m. in Tokyo, with seven stocks rising for every two that fell. The dollar climbed to a six-month high against the euro before a report forecast to show the U.S. economy expanded at the fastest pace in almost four years. Copper and aluminum led declines in industrial metals amid concern China, the largest materials consumer, will curb its economic growth.
Asian stocks broke the longest losing streak since May 2004 as Canon Inc. projected its biggest profit increase in a decade, while the Nikkei newspaper said earnings may climb for Sony Corp. and Honda Motor Co. Stocks also rallied after President Barack Obama said in his State of the Union address that the “worst of the storm has passed’’ for the U.S. economy.
“Uncertainties that overwhelmed markets in the past few days such as tightening concerns in China are subsiding,” said Chu Moon Sung, a fund manager at Shinhan BNP Paribas Asset Management Co., which manages $26 billion. “Investors are shifting their attention to the fact that the overall recovery trend of the economy remains intact and there may be upgrades in earnings estimates.”
Japan’s Nikkei 225 Stock Average surged 1.8 percent, the Hang Seng Index added 1.8 percent and Taiwan’s Taiex index climbed 2.1 percent.
S&P Futures Rise
Futures on the Standard & Poor’s 500 Index added 0.8 percent. The gauge gained 0.5 percent yesterday as the Fed reiterated a pledge to keep rates low “for an extended period” and Apple unveiled a $499 tablet computer that costs half what some analysts estimated. Wintek Corp., a Taiwanese maker of Apple’s flat-panel displays, rose 1.3 percent.
Microsoft Corp., Ford Motor Co. and AT&T Inc. are among S&P-listed companies reporting earnings today.
Canon, the world’s biggest camera maker, rose 1.9 percent to 3,685 yen after saying yesterday net income will probably jump 52 percent this year. Honda, Japan’s second-largest carmaker, added 4.9 percent to 3,190 yen. It will likely post an operating profit of more than 300 billion yen ($3.3 billion) for the year to March, compared with its 190 billion yen forecast, Nikkei English News reported. Sony, which makes the PlayStation 3 game console, jumped 4.4 percent to 3,070 yen. The company may report its first profit in five quarters, Nikkei said.
Toyota Motor Corp. fell 1.8 percent to 3,640 yen, its fifth straight decline, after it expanded recalls by more than 1 million vehicles, a day after announcing it would suspend the sale and production of models that account for more than half its U.S. deliveries
The MSCI Asia Pacific Index sank 6.9 percent in the past eight days as U.S. President Barack Obama proposed measures to limit risk taking at banks and concern grew China will rein in growth. The equity gauge is still 42 percent higher from a year ago, having gained on optimism for a global economic recovery.
Banks in China, which have been powering the recovery in the world economy, were told by regulators to step up scrutiny of property loans as it seeks to control credit growth and prevent asset bubbles. Bank of China Ltd. fell 1 percent and China Citic Bank Corp. lost 2.9 percent. China Vanke Co., the nation’s largest listed developer, declined 0.9 percent. Poly Real Estate Group Co., the second-biggest, dropped 1.6 percent.
The dollar rose to a six-month high against the euro on speculation the Fed will relax its low-interest rate stance amid signs the U.S. economy is gathering momentum, boosting demand for the nation’s assets.
The dollar strengthened to $1.3982 per euro from $1.4024 in New York yesterday, after climbing to $1.3938, the strongest since July 14. The greenback rose to 90.32 yen from 90 yen.
Kansas City Fed President Thomas Hoenig said the time has come to change the promise to keep rates low. The Fed reiterated at the conclusion of its two-day policy meeting yesterday that interest rates will stay low for an “extended period” and held its target lending rate at zero to 0.25 percent.
“With Hoenig sounding relatively hawkish, they are a bit more upbeat than people had expected,” said Danica Hampton, a senior strategist at Bank of New Zealand Ltd. in Wellington. “The U.S. dollar is going to find a bit more support. I think that will be further supported with the U.S. GDP data.”
Economists in a Bloomberg survey forecast U.S. gross domestic product expanded 4.6 percent in the fourth quarter after gaining 2.2 percent in the third. The Commerce Department in Washington is set to release the data tomorrow. That would be the strongest since the first three months of 2006.
Oil traded near a five-week low after falling yesterday as a government report showed inventories of gasoline rose to a 22- month high in the U.S., the world’s biggest energy consumer.
Crude oil for March delivery was at $73.97 a barrel in electronic trading on the New York Mercantile Exchange at 9:27 a.m. Singapore time. Yesterday, the contract fell $1.04 to $73.67, the lowest settlement since Dec. 21.
Copper for three-month delivery dropped 2 percent to $7,088 a metric ton on the London Metal Exchange, near a one-month low, as China, the world’s biggest metals consumer, takes steps to rein in lending to cool the economy. The metal has lost 4.9 percent in three days. Aluminum declined 2.1 percent to $2,135 a ton as the dollar gained for a third day against six major currencies. Gold was little changed at $1,086.50 an ounce.