Asia Stocks Swing From Gain to Loss; David Jones Gains

By Adam Haigh 

Asian stocks swung between gains and losses as a rally in Chinese shares offset declines fueled by concern that Cyprus’s rejection of a bailout plan shows Europe will struggle to contain its debt crisis.

Sands China Ltd., the Macau unit of Las Vegas Sands Corp., rose 4.6 percent, leading gains among Hong-Kong listed shares. David Jones Ltd., Australia’s second-biggest department store chain, rose 3.6 percent as profit topped estimates. BHP Billiton Ltd. and Rio Tinto Group, the largest mining companies, declined more than 2 percent in Sydney after commodities gauges dropped yesterday. The MSCI Asia Pacific Excluding Japan Index rose 0.1 percent to 468.62 as of 12:34 p.m. in Hong Kong, having earlier fallen as much as 0.5 percent. Japanese equity markets are closed for a holiday.

“It’s a great opportunity for anybody who has been left behind by the stock market rally,” Giles Keating, head of research for private banking and asset management at Credit Suisse Group AG, told Bloomberg Television from Hong Kong today. “This shows investors are realizing these problems are not on a grand scale and that they realize there is value in stock markets. There will be little ups and downs along the way, but the message is: use the downs to buy.”

Economic Stimulus

The MSCI Asia Pacific excluding Japan Index (MXAPJ) gained 5.8 percent in the six months through yesterday as improving economic data from the U.S. and central banks’ stimulus countered concern over China’s efforts to rein in property prices.

The measure traded at 12.3 times estimated earningsyesterday compared with 14 for the Standard & Poor’s 500 Index and a multiple of 12.7 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Hong Kong’s Hang Seng Index rose 0.9 percent with volumes 3.1 percent above the 30-day average for the time of day. The measure fell 2.7 percent this year through yesterday, the worst- performing index this year aside from Italy among 24 developed- equity markets tracked by Bloomberg. Sands China advanced 4.6 percent to HK$37.65.

The Hang Seng may climb to 50,000 by the end of 2015 as global central banks maintain loose monetary policies and as China’s economy grows, Morgan Stanley global strategist Jonathan Garner wrote in a report yesterday. The banks bull case represents a 127 percent advance from yesterday’s closing level.

The Shanghai Composite Index (SHCOMP) rose 2.1 percent, the most in two weeks. The Chinese gauge will rebound this week to resume a rally from a December low that will leave it 48 percent higher within the next six months, according Tom DeMark, the founder of Market Studies LLC.

Shanghai Rally

The Shanghai Composite, which closed at 2,257.43 yesterday, will resume the rally once it falls below 2,232 today or tomorrow, DeMark said. The Paradise Valley, Arizona-based creator of indicators to show turning points in securities said Feb. 6 that the measure would decline about 8 percent to within a range of 2,230 to 2,250 before rebounding. The index was down 8 percent from when he made the call to the March 18 close of 2,240.02.

Manufacturing in the world’s second-largest economy expanded this month, forecasts show ahead of the release of a preliminary HSBC Holdings Plc and Markit Economics manufacturing index tomorrow. The gauge may rise to 50.8 from 50.4 in February, according to the median estimate of 11 analysts in a Bloomberg survey. A reading above 50 indicates expansion.

Futures on the Standard & Poor’s 500 Index retreated 0.1 percent today. The S&P 500 dropped 0.2 percent yesterday, sending the gauge to its longest slump of the year, as Cyprus lawmakers rejected a levy on bank deposits, dealing a blow to European plans to force savers to shoulder part of the country’s bailout.

Hammered out by euro-area finance chiefs at the weekend, the deal had sought to raise 5.8 billion euros ($7.5 billion) by drawing funds from Cyprus bank accounts in return for 10 billion euros in aid. While the Mediterranean island nation accounts for less than half a percent of the euro economy, the fight over the bank tax risks triggering new turmoil in the financial crisis that began in 2009 in Greece.

‘Confidence Shot’

“Confidence is shot,” said Chris Bertelsen, chief investment officer at Global Financial Private Capital, a Sarasota-based private wealth firm with about $1.7 billion in assets under management. “It’s a major shot across the bow in terms of the faith investors have in European policy makers. It’s going to continue to affect global markets going forward and is a good reason for the market, that had been pretty giddy, to have a bit of a correction.”

The Federal Open Market Committee will conclude a two-day meeting today. Policy makers agreed in December to link record- low interest rates to thresholds for unemployment and inflation so that investors and households know what conditions will prompt the Federal Reserveto consider raising rates.

Australia’s S&P/ASX 200 Index (AS51) slid 0.3 percent as commodity producers led declines, with volume 3.4 percent above the 30-day average for the time of day. BHP Billiton lost 2.5 percent to A$33.68 and Rio Tinto slipped 2 percent to A$57.48.

South Korea’s Kospi Index declined 0.4 percent and New Zealand’s NZX 50 Index rose 0.1 percent. Singapore’s Straits Times Index retreated 0.3 percent as did Taiwan’s Taiex Index.

David Jones climbed 3.6 percent to A$3.065 as profit for the first half of the financial year of A$73.5 million topped analyst estimates of A$70.7 million.

Country Garden Holdings Co. surged 6.9 percent to HK$3.86. Brokerages from BNP Paribas SA to Bank of China raised recommendations on the shares after the Chinese developer controlled by billionaire Yang Huiyan yesterday reported profit that beat analyst estimates.

India’s Sensex Index (SENSEX) was little changed. Indian Prime Minister Manmohan Singh will today seek to mend a rift with his biggest ally after it vowed to quit the ruling coalition over policy on alleged warcrimes in Sri Lanka, undermining the minority administration.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

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