Asian markets rose, driving the MSCI Asia Pacific Index to a two-week high, as Applied Materials Inc forecast a higher-than-estimated profit and speculation increased that Japan’s government will extend a mortgage programme.
Tokyo Electron, the world’s second-biggest producer of chipmaking equipment, climbed 5.3 per cent after larger rival Applied Materials said it got “strong” orders. Brambles, the No. 1 supplier of wooden pallets, surged 4 per cent in Sydney on earnings that topped analysts’ forecasts. Mitsubishi Estate Co, Japan’s largest developer by market value, jumped 3.1 per cent after the Yomiuri newspaper said the country’s housing- loan agency will extend low mortgage rates.
“I’m telling people not to be too pessimistic,” said Kenji Sekiguchi, general manager of strategic research and investment at Mitsubishi UFJ Asset Management Co, which oversees about $73 billion in Tokyo. “The market in the second half of this year will reflect positive earnings more explicitly than the latest earnings season.”
The MSCI Asia Pacific rose 0.8 per cent to 119.97 as of 7:27 pm in Tokyo, the most since August 3. Japan’s Nikkei 225 Stock Average climbed 1.3 per cent. South Korea’s Kospi index advanced 1 per cent. China’s Shanghai Composite Index rose 0.8 per cent. Hong Kong’s Hang Seng Index increased 0.2 per cent.
The MSCI Asia Pacific has jumped 2.3 per cent in the past five days after companies from Westfield Group to PICC Property & Casualty Co and China Merchants Bank Co exceeded analysts’ earnings estimates. The index, down 0.6 per cent for the year, slumped 3.7 per cent last week, the most since May.
Technology shares
Futures on the Standard & Poor’s 500 Index gained 0.6 per cent. The index advanced 0.2 per cent yesterday in New York as homebuilders and commodity producers rose, while energy companies slumped as oil prices dropped.
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A gauge of technology stocks in the MSCI Asia Pacific climbed 1.3 per cent, accounting for 23 per cent of the broader index’s rally. Among the 10 industries in the index, the group has been the worst performer this month with a 1.2 per cent drop.
Tokyo Electron advanced 5.3 per cent to 4,370 yen. Hynix Semiconductor Inc, the world’s second-largest maker of computer-memory chips, jumped 3.7 per cent to 22,500 won.
Applied Materials, which produces machinery to build semiconductors, said profit in the current period will be 28 cents to 32 cents a share, excluding certain items. That topped the average estimate of 26 cents in a Bloomberg survey.
Sales of chipmaking equipment will more than double this year to $32.5 billion, with Taiwan, South Korea and Japan accounting for a combined 64 per cent of expenditure, industry organisation SEMI said in a July 13 statement.
Earnings growth
Brambles gained 4 per cent to A$5.51. The company said full- year profit was $448.8 million, exceeding the average forecast of $427 million from four analyst estimates compiled by Bloomberg. China Merchants Bank, which also reported higher- than-estimated profit, rose 2.2 per cent to HK$20.60 in Hong Kong.
Profits for companies in the MSCI Asia Pacific are forecast to rise 26 per cent in the next 12 months. That compares with 27 per cent growth for the MSCI World Index of stocks in 24 developed nations.
“First-half earnings tend to be pretty positive because of the lower base last year,” said Ben Kwong, chief operating officer at KGI Asia Ltd. “What gets me worried though is a potential economic slowdown in the second half.”
Japan’s Nikkei 225 Stock Average rose today by the most since August 5 amid mounting speculation the government will take new steps to stimulate the economy. Prime Minister Naoto Kan asked ministers to consider fresh measures after a government report on August 16 showed the country’s economy grew 0.4 per cent last quarter, less than a fifth of the pace economists estimated.