Feb. 16 (Bloomberg) -- Asian stocks rose for the fifth time in six days, copper and aluminum advanced and the Australian dollar gained as signs of improving corporate earnings strengthened confidence in the global economic recovery.
“We continue to see robust earnings being reported globally,” said Tim Schroeders, who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne. “This should serve to buoy valuations and increase the attractiveness of stocks once greater certainty in the macro-economic outlook occurs.”
The MSCI Asia Pacific Index climbed 0.5 percent to 116.39 at 2:02 p.m. in Tokyo as Westpac Banking Corp.’s profit climbed and OneSteel Ltd. said demand is rising. Copper on the London Metal Exchange rallied 0.7 percent to $6,915 a metric ton and aluminum increased 0.7 percent to $2,068 a ton. Australia’s currency climbed 0.5 percent to 89.29 U.S. cents from 88.84 cents in New York yesterday. The currency rose 0.4 percent to 80.31 yen from 79.97 yen. Standard & Poor’s 500 futures fell 0.1 percent. U.S. markets resume trading today after a holiday.
The Australian dollar gained against 15 of its 16 most- traded counterparts as comments by the central bank stoked speculation of further interest rate increases and a survey of 410 companies showed business confidence improved in January. The yen weakened on prospects deflation will force the Bank of Japan to keep rates low for an extended period.
Australia’s S&P/ASX 200 Index rose 0.4 percent. Japan’s Nikkei 225 Stock Average gained 0.4 percent. South Korea’s Kospi Index advanced 0.5 percent. Equity markets in China, Hong Kong, Taiwan, Singapore, Vietnam and Malaysia are shut for the Lunar New Year.
Westpac, Australia’s second-biggest lender, climbed 5.8 percent to A$24.66 after saying fiscal first-quarter profit climbed 33 percent as it sold more loans and fewer customers defaulted.
OneSteel, the country’s second-largest producer of the alloy, jumped 4.7 percent to A$3.37. There’s a “slow, steady” improvement in Australian demand and that will continue in the first half of 2010, Chief Executive Officer Geoff Plummer said today on a conference call.
Material producers and industrials accounted for 27 percent of the MSCI Asia Pacific Index’s advance today as metal prices climbed. Posco, Asia’s biggest steelmaker, rose 2.4 percent to 547,000 won. Rio Tinto Group, the world’s third-largest mining company, added 0.3 percent to A$70.37 in Sydney.
Australia’s policy makers unexpectedly left rates unchanged at 3.75 percent this month and said today in minutes of that Feb. 2 meeting that the decision was “finely balanced.” New Zealand’s currency gained as Asian equities advanced.
‘Positive’ for Aussie
“It leaves a fairly strong indication that they’ve got further hikes to do, which should be somewhat positive for the Aussie,” said Greg Gibbs, a currency strategist with Royal Bank of Scotland Group Plc in Sydney. “There’s probably not enough risk of a tightening in March priced into the market.”
The National Australia Bank Ltd.’s confidence index rose 7 points to 15, according to a survey of 410 companies released in Sydney today.
The Bank of Japan meets tomorrow. The central bank’s policy board is forecast to maintain its key interest rate at 0.1 percent.
“While overseas central banks are flagging an exit from credit easing, the Bank of Japan is nowhere near,” said Hiroshi Maeba, deputy general manager of foreign-exchange trading in Tokyo at Nomura Securities Co., Japan’s biggest securities broker. “Given the yield disadvantage in Japan, it would not be a surprise if the yen weakened further.”
The yen declined to 122.72 per euro from 122.38.
Oil and Greece
Crude oil traded near $74 a barrel as the euro held close to a nine-month low against the dollar after European leaders refused to detail how they would rescue debt-laden Greece should it fail to finance its debt.
“Markets are waiting to see what happens with the outcome of the European Commission meeting and the details of any sort of bailout plan,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “There is a raft Asian markets closed. With the volumes going through, there doesn’t look like a lot of activity.”
Crude oil for March delivery was at $74.31 a barrel, up 18 cents, in electronic trading on the New York Mercantile Exchange. The number of front-month contracts traded yesterday and by 12:11 p.m. in Sydney today totaled 19,865, compared with the five-year daily average of 326,000.
Gold for immediate delivery rose 0.6 percent to $1,107.85 an ounce. Platinum advanced 0.9 percent to $1,528 an ounce.
The cost of protecting Australian and Japanese corporate bonds from default increased. The Markit iTraxx Australia index climbed 2 basis points to 105 basis points in Sydney, according to Australia & New Zealand Banking Group Ltd. The Markit iTraxx Japan index rose 0.5 basis points to 153.5 basis points in Tokyo, the highest since Feb. 5, price from BNP Paribas SA and CMA DataVision in New York show.