Oil and most Asian stocks climbed after a survey added to signs of economic recovery in China, while the Japanese yen fell to an almost nine-month low amid speculation of further monetary easing after elections.
Crude gained 0.8 percent in New York as of 1:33 p.m. in Tokyo as copper climbed 0.2 percent in London. The MSCI Asia Pacific (MXAP) Index swung between gains and losses after an 11-day rally that was the longest in more than three years. Standard & Poor’s 500 Index futures rose 0.3 percent. Japan’s yen weakened 0.3 percent to 109.74 per euro.
China’s factory production may expand at a faster pace this month, based on a report today by HSBC Holdings Plc and Markit Economics. The Bank of Japan’s Tankan index showed confidence among manufacturers worsened, raising bets for further stimulus following an expected win by the opposition in the weekend vote. Data today may show consumer prices in the U.S. fell last month and factory output edged up as President Barack Obama and Republicans remain deadlocked over the budget.
“Valuations don’t look particularly excessive to me,” said Stephen Corry, Hong Kong-based chief investment strategist at LGT Group, a private banking and asset management group that manages about $102 billion. “With the reacceleration of the Chinese economy and a better cyclical outlook for the first half of next year, people are more confident in the price-earnings multiples that they’re paying.”
About five shares climbed for every four that fell on the MSCI Asia Pacific Index. Stocks on the regional benchmark traded at 14.4 times estimated earnings, versus 13.7 times for the S&P 500 Index and 12.7 times for the Stoxx Europe 600.
Japan’s Nikkei 225 Stock Average gained 0.2 percent while Hong Kong’s Hang Seng Index rose 0.6 percent. The Shanghai Composite Index jumped 2.9 percent. Taiwan’s Taiex Index dropped 0.8 percent.
PetroChina Co. (857), the nation’s biggest oil producer, added 1.7 percent after agreeing to set up a venture with Canada’s Encana Corp. Samsung Electronics Co. dropped 0.8 percent in Seoul after touching a record yesterday. Hon Hai Precision Industry Co. fell the most in almost five months in Taipei after Macquarie Group Ltd. cut its rating and target price.
The reading on the Chinese purchasing managers’ index was 50.9, according to HSBC and Markit, compared with a 50.8 median estimate in a Bloomberg News survey of economists. November’s final reading was 50.5, the first time in 13 months where the gauge exceeded the 50 mark dividing expansion and contraction.
Oil rose to $86.53 a barrel in New York while copper climbed to $8,089 a metric ton in London. Soybeans in Chicago added 0.4 percent.
Japan’s large manufacturers became the most pessimistic since March 2010, the central bank’s quarterly survey showed. The Tankan index fell to minus 12 in December from minus 3 in September, a fifth straight negative reading. The median estimate of economists surveyed by Bloomberg News was for minus 10. A negative figure means pessimists outnumber optimists.
“This should put additional pressure on the BOJ to do something to reflate the Japanese economy and to invigorate growth,” said Takuji Okubo, Tokyo-based chief economist at Japan Macro Advisors, in a Bloomberg Television interview. Investors will “take it as a sign that the BOJ will be pressed into doing something which should weaken the yen.”
The yen fell for a fourth day against the euro and dollar before elections during the weekend that polls showed will see Shinzo Abe lead the opposition to power. His party has called for further monetary easing to lift the economy. The Japanese currency declined 0.3 percent to 83.89 versus the dollar.