Asian Stocks Rise With Gold as New Zealand Dollar, Yen Advance

By Pratish Narayanan & Yoshiaki Nohara 

Asian stocks rose as gold headed for its biggest weekly gain since October 2011 as companies from Bank of China Ltd. (3988) to Japan Tobacco Inc. reported earnings. The New Zealand dollar climbed and the yen was poised for its first weekly gain in four as Japan’s central bank meets.

The MSCI Asia Pacific Index (MXAP) added 0.3 percent as of 12:32 p.m. in Tokyo, poised for its highest close since May 2011. Standard & Poor’s 500 Index futures lost 0.2 percent. Gold increased 0.5 percent, while copper in London sank 0.5 percent. New Zealand’s dollar advanced 0.4 percent after the country’s trade surplus widened more than forecast. The yen strengthened 0.4 percent versus the dollar. Bank of Japan (8301) officials will unveil inflation and gross domestic product forecasts after meeting today for the first time since announcing unprecedented monetary easing this month. Data today may show the U.S. economy grew 3 percent in the first quarter amid speculation the European Central Bank will cut interest rates next month. Some 55 percent of MSCI Asia Pacific Index companies reported quarterly profit that missed analyst estimates, data compiled by Bloomberg show.

“Equities can go higher, but it’s not without risk because earnings aren’t really justifying prices moving higher,” said Tim Schroeders, a portfolio manager who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Policy settings are very accommodative. The question remains globally in terms of how effective that policy is.”

Asian Earnings

Japan Tobacco, the world’s best-performing cigarette maker this year, surged 4.4 percent after it forecast profit that beat analysts’ estimates and raised its projected annual dividend.Bank of China, which reported record quarterly profit, gained 1.7 percent in Hong Kong.

Nomura Holdings Inc. and Industrial & Commercial Bank of China Ltd. are among the more than 200 Asian companies reporting earnings today. Nomura lost 1 percent, while ICBC advanced 0.9 percent.

Samsung Electronics Co. slid 0.7 percent, trimming its gain in the past year to 11 percent, even as it posted a record quarterly profit that topped analyst estimates on surging sales of Galaxy handsets. Investors may not buy on today’s news as the company already reported preliminary operating profit on April 5, said Heo Pil Seok, chief executive officer at Midas International Asset Management Ltd.

Gold Rebound

Gold for immediate delivery climbed 0.5 percent to $1,475.29 an ounce, taking its gain this week to 5.1 percent. The metal, rebounding after the worst slump in three decades, has surged 12 percent from a two-year low on April 16 as coin and jewelry demand expanded from the U.S. to China and India. Bullion is 5.4 percent below the close on April 11, the day before the rout began.

“Emerging markets physical demand is likely to remain strong in the near term, which would help support bullion prices,”James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “Emerging-markets central banks’ growing appetite for gold is likely to help support prices.”

Copper futures in London dropped 0.6 percent to $7,138.25 a metric ton, reversing an earlier gain of as much as 1.1 percent.

Yen, Won

The yen rose 0.4 percent to 98.87 per dollar, extending its weekly advance to 0.8 percent before Bank of Japan Governor Haruhiko Kuroda and his fellow board members conclude their second policy meeting this month.

South Korea’s won appreciated 0.4 percent today, touching a four-week high of 1,107.85 of per dollar. It rallied 0.7 percent this week, poised for a third week of gains. New Zealand’s currency advanced 0.4 percent to 85.31 U.S. cents.

China’s yuan was poised for its biggest weekly gain in six months after the central bank set a record reference rate for the currency amid signs capital inflows are gathering pace.

The yuan rose 0.25 percent this week to 6.1620 per dollar, according to the China Foreign Exchange Trade System. It gained 0.15 percent today and touched 6.1616, the strongest level since the government unified the official and market exchange rates at the end of 1993.

To contact the reporters on this story: Pratish Narayanan in Mumbai atpnarayanan9@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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