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Asia Stocks Rise First Time in 5 Days, Led by Materials

Sumitomo Dainippon Pharma Co. surged 4 percent in  Tokyo , leading pharmaceutical companies to the largest gain among 10 industry groups on the regional index, after Canada approved the use of one of its drugs. Hyundai Development Co-Engineering & Construction gained 3.6 percent in Seoul. Hyundai Hysco Co. slumped 4.1 percent as the U.S. government imposed duties on steel pipe from  South Korea  and eight other nations

The  MSCI Asia Pacific Index (MXAP)  added 0.2 percent to 146.24 as of 9:38 a.m. in Tokyo, before markets open in Hong Kong and China. Two shares rose for each that fell. The gauge fell 1.1 percent last week, its first retreat in nine weeks, after equity valuations touched the highest level this year and the yen strengthened against the dollar. More than 150 U.S. companies are scheduled to report quarterly results in the next two weeks, including Citigroup Inc., JPMorgan Chase, Goldman Sachs Group Inc. and Johnson & Johnson.

“It’s a very quiet day for macro data that will influence the region, so it’s likely that most indexes on this side of the world will tread water,” said Evan Lucas, a Melbourne-based market strategist at IG Ltd. “The second-quarter earnings season in the U.S. is likely to be the next major driver of global markets. With all the major U.S. banks reporting this week, the market will get the best view of the self-sustaining  U.S. economy  that the  Federal Reserve  now sees.”

Regional Gauges

Japan’s Topix index rose 0.1 percent. Australia’s S&P/ASX 200 Index added 0.4 percent and New Zealand’s NZX 50 Index climbed 0.1 percent. South Korea’s Kospi Index advanced 0.3 percent.

Profit at Standard & Poor’s 500 Index companies probably rose 4.5 percent in the three months through June, while sales gained 3.1 percent, estimates compiled by Bloomberg show. Forecasts have been cut since the start of April, when analysts predicted a 7.3 percent jump in earnings and 3.7 percent gain in sales.

More than $1 trillion has been wiped from the value of global stocks since a peak reached July 3, as analysts brought forward estimates for Fed rate increases and a parent of Portugal’s Banco Espirito Santo SA missed a bond payment, reigniting concerns over Europe’s financial stability as it emerges from its sovereign-debt crisis.

Futures on  Hong Kong ’s  Hang Seng Index (HSI)  were little changed in most recent trading, while contracts on the Hang Seng China Enterprises Index of mainland equities listed in the city fell 0.1 percent. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in  New York added 0.5 percent July 11, trimming its first weekly decline since May to 2.4 percent.

The MSCI Asia Pacific Index traded at 13.3 times estimated earnings at the last close compared with 16.6 for the  S&P 500 , according to data compiled by Bloomberg. Futures on the U.S. equity gauge rose 0.1 percent today after the underlying index added 0.2 percent July 11.


(Source: Bloomberg)