Asian Stocks Advance Led by Chipmakers; Miners Rebound

By Jonathan Burgos

Asian stocks rose, erasing earlier losses, as Taiwan Semiconductor Manufacturing Co. led technology shares higher. Mining companies pared their worst weekly decline since August.

TSMC, as the biggest contract maker of chips is known, jumped 6.6 percent in Taipei after forecasting record quarterly sales. Rio Tinto Group, the world’s No. 2 mining company, climbed 2.6 percent in Sydney after a six-day, 11 percent decline. Industrial and Commercial Bank ofChina Ltd., the world’s No. 1 lender by market value, rose 2.6 percent amid speculation China will widen the yuan’s trading band next week. The MSCI Asia Pacific Index gained 0.2 percent to 136.14 as of 12:15 p.m. in Tokyo, reversing a decline of 0.3 percent. A gauge of material producers in the measure added 0.9 percent, paring its weekly loss to 4.6 percent, the most since July.

“The sell-down looks overdone,” said Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Bank, which oversees about $207 billion. “We still see that global economic growth will pick up in the second half of the year, although positive economic surprises from the U.S. will likely be lesser. Equities as an asset class still look cheap.”

About five shares rose for every three that fell on the Asia-Pacific gauge. The measure is heading for a 1.4 percent decline this week after China’s economy expanded less than economists estimated and the International Monetary Fund cut its global growth forecast.

Relative Value

The MSCI Asia Pacific Index advanced 5 percent this year through yesterday, led by Japanese shares, amid optimism the Bank of Japan will step up efforts to stimulate the economy. Shares on the benchmark gauge traded at 13.7 times estimated earnings compared with 13.9 for the Standard & Poor’s 500 Index and 12.3 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Japan’s Nikkei 225 Stock Average rose 0.6 percent. South Korea’s Kospi index gained 0.1 percent, erasing earlier losses of as much as 0.6 percent. New Zealand’s NZX 50 Index added 0.2 percent, while Australia’s S&P/ASX 200 Index swung between gains and losses. Hong Kong’s Hang Seng Index advanced 0.9 percent, while China’s Shanghai Composite Index jumped 1.2 percent. Taiwan’s Taiex Index climbed 1.6 percent.

Futures on the S&P 500 Index rose 0.5 percent today. The gauge yesterday fell 0.7 percent as earnings from UnitedHealth Group Inc. to EBay Inc. disappointed investors, a measure of manufacturing in the Philadelphia region expanded at a slower pace and the Conference Board’s index of U.S. leading economic indicators unexpectedly declined for the first time in seven months.

TSMC, Lenovo

Information-technology companies posted the biggest advance among the 10 industry groups in the MSCI Asia Pacific Index. (MXAP)

TSMC jumped 6.6 percent to NT$106.5 in Taipei. The company forecast second-quarter revenue will be between NT$154 billion ($5.2 billion) and NT$156 billion. That’s at least 9 percent higher than the NT$141.2 billion average of 21 analyst estimates compiled by Bloomberg.

Lenovo Group Ltd., the world’s second-largest maker of personal computers, advanced 4.2 percent to HK$6.72 in Hong Kong. The Chinese company has emerged as the most likely bidder for International Business Machines Corp.’s low-end server business, a person familiar with the matter said.

Raw-material producers advanced. Rio Tinto climbed 2.6 percent to A$53.43 in Sydney.Newcrest Mining Ltd. (NCM), Australia’s biggest gold producer, rose 2 percent to A$16.205, paring its biggest weekly loss since October 2008. BHP Billiton Ltd., the world’s largest mining company and Australia’s No. 1 oil producer, gained 1.8 percent to A$31.195.

Chinese Yuan

Chinese lenders rose. The government will probably widen the yuan’s trading band by the end of the coming weekend after People’s Bank of China Deputy Governor Yi Gang signaled policy makers will loosen control over the currency, according to UBS AG. The move may be announced as finance chiefs from the Group of 20 nations meet in Washington this week, UBS analysts Manik Narain and Geoffrey Yu wrote in a note.

ICBC, as China’s largest lender is known, rose 2.6 percent to HK$5.19 in Hong Kong. China Construction Bank Corp. (939), the second-biggest, increased 1.8 percent to HK$6.13. Agricultural Bank of China Ltd. climbed 2.1 percent to HK$3.47.

Among stocks that fell, Celltrion Inc. tumbled 15 percent to 31,350 won in Seoul. The company said it postponed a late- stage trial of a biosimilar version of Roche Holding AG’s best- selling Rituxan drug used in treating non-Hodgkin lymphoma patients, potentially benefiting competitors such as Boehringer Ingelheim GmbH and Novartis AG.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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