Most Asian Stocks as Japan’s Topix, Nikkei 225 Rebound

Most Asian Stocks as Japan’s Topix, Nikkei 225 Rebound
By Jonathan Burgos - May 31, 2013 11:21 AM GMT+0800

Most Asian stocks gained, with Japanese equity gauges rebounding after entering a so-called correction yesterday, following reports that Japan’s pension fund may boost stock holdings and nation’s industrial output expanded faster than analysts estimated.
Mitsubishi Estate Co., Japan’s biggest developer by market value, rose 2.1 percent. Sony Corp. jumped 3.7 percent in Tokyo as people familiar with the matter said the electronics maker is working with Morgan Stanley and Citigroup Inc. to consider adopting Daniel Loeb’s proposal for an initial public offering of its entertainment unit. Leighton Holdings Ltd. (LEI), Australia’s largest builder, dropped 4.6 percent, extending losses for a third day and heading for lowest close since Dec. 20.

The MSCI Asia Pacific Index added 0.1 percent to 135.70 as of 12:20 p.m. in Tokyo, with about three shares rising for every two that fell. Six of the 10 industry groups on the gauge advanced. The measure is heading for its first monthly decline in seven months after Japanese indexes entered a correction yesterday after reaching about five-year highs on May 22.
“The correction has to be viewed in the context of an overall bull markets for Japanese shares,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $126 billion. “We are just beginning to see the impact of Japan’s monetary easing. Companies in Japan are posting positive earnings growth and economic indicators are improving.”
Japan’s Topix index rose 0.6 percent and the Nikkei 225 Stock Average gained 1.6 percent. Both gauges plunged more than 10 percent through yesterday from their May 22 high, entering what some investors define as a correction.

Economic Revival
Shares advanced today as a report showed Japan’s industrial production rose 1.7 percent in April, exceeding the highest estimate in a Bloomberg News survey of economists and helping Prime Minister Shinzo Abe’s economic-revival campaign. A separate report showed consumer prices dropped for a sixth straight month in April, in line with expectations.
Even after yesterday’s plunge, the Topix and the Nikkei 225 are still up more than 30 percent this year after the Bank of Japan pledged to reach 2 percent inflation within two years with unlimited bond buying and by doubling the monetary base.
Japan’s $1 trillion Government Pension Investment Fund is considering changes that would allow greater investment in shares, Reuters reported yesterday, citing unidentified people familiar with the matter. The shift would be the fund’s most significant revision in strategy since 2006, according to the news agency.

U.S. Futures
South Korea’s Kospi index added 0.2 percent, while Taiwan’s Taiex Index rose 0.4 percent. New Zealand’s NZX 50 Index climbed 1 percent. Australia’s S&P/ASX 200 Index (AS51) and China’s Shanghai Composite Index both gained 0.2 percent. Hong Kong’s Hang Seng Index swung between gains and losses. Singapore’s Straits Times Index fell 0.7 percent, heading for lowest close since April 23.
Futures on the Standard & Poor’s 500 Index rose 0.1 percent. The gauge advanced 0.4 percent yesterday as weaker-than-expected data on economic growth and jobless claims boosted speculation the Federal Reserve will maintain stimulus.
“It’s becoming unlikely that the Fed will hurriedly exit from stimulus,” said Juichi Wako, a Tokyo-based strategist at Nomura Securities Co., Japan’s biggest brokerage.
Shares on the MSCI Asia Pacific Index traded at 13.3 times estimated earnings yesterday, compared with 15 times for the S&P 500 and 13.4 times the Stoxx Europe 600 Index, according to data compiled by Bloomberg News.
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