Asia shares up as US manufacturing gains

Bloomberg/Singapore

A man stands before a stock market indicator board in Tokyo, yesterday. Japanese stocks rose to climb briefly above the 10,000 mark for the first time in two months following optimism over the US economic growth. The Nikkei gained 97.02 points, or 1%, to close at 9965.09

Asian stocks advanced, with the regional benchmark index set for its longest winning streak in six months, as exporters climbed after US manufacturing unexpectedly grew and Europe prevented a default by Greece.The MSCI Asia Pacific Index gained 1.3% to 137.29 in Tokyo. The gauge briefly pared gains after Standard & Poor’s Rating Services said a Greek debt rollover plan may place the country in “selective default.”All 10 industry groups on the measure rose, driving the index to its highest level since May 11 and its longest streak of daily advances since Jan 4.Japan’s Nikkei 225 Stock Average increased 1%. South Korea’s Kospi Index climbed 0.9% and Australia’s S&P/ASX 200 Index advanced 0.4%. Hong Kong’s Hang Seng Index rose 1.7% and China’s Shanghai Composite Index gained 1.9%.The Bangkok SET Index jumped 4.7%, the most among the region’s benchmark gauges, after the Pheu Thai party, whose head is Yingluck Shinawatra, the sister of an exiled former Thai leader, won a parliamentary majority that may lessen the risk of a military intervention.“The increase in the manufacturing index shows US consumption is favourable, and signals the economy will further recover through the end of this year,” said Takero Inaizumi, head of equity research in Tokyo at Mizuho Investors Securities Co.“The investment environment is changing as concerns ease about a US economic slowdown and Greek debt.”Global stocks also rose on July 1 as Greece moved closer to averting a default. Greece may receive as much as €85bn ($124bn) in a second bailout aimed at preventing default, Thomas Wieser, an Austrian Finance Ministry official, said on Thursday.Increasing confidence about the Greek fiscal deficit resolution and the US economy boosted the shares of Asian exporters, with the gauge for consumer discretionary stocks, which include electronics manufacturers and automakers, rising 1.4%, the second-most among the 10 industry groups on the broader MSCI Asia Pacific Index after utilities.Samsung Electronics advanced 2.7% to 878,000 won in Seoul, the biggest support to the MSCI Asia Pacific Index. Toyota, which receives 27% of its sales from North America and 10% from Europe, gained 1.5% to ¥3,385 in Tokyo. Honda increased 3.5% to ¥3,220.The euro earlier gained to three-week highs versus the dollar and yen on speculation the European Central Bank will raise interest rates this week after the region pulled debt- stricken Greece from the brink of default.The currency then pared advances after S&P said if a French plan allowing bondholders to roll over their debt is implemented, it may place Greece temporarily in a “selective default.”Europe’s common currency traded at €117.40 yesterday in Tokyo, after rising to as high as 117.74 earlier. This compares to 117.14 at the close of stock trading on Tokyo on July 1. A stronger euro boosts the value of European income at Japanese companies when converted into their home currency.“The European countries have put in so much effort the past two weeks in having a plan to help Greece, and this is just such a small technical issue,” said Alex Au, Hong Kong-based managing director of Richland Capital Management Ltd, which oversees $300mn of assets, of S&P’s comments. “Eventually they will do whatever they can to solve this.”Energy stocks rose today as oil prices increased in New York, extending last week’s rally. BHP, which receives 17% of its revenue from petroleum, advanced 0.6% to A$44.02 in Sydney.Cnooc Ltd, a Chinese offshore oil refiner, gained 1.9% to HK$18.50 in Hong Kong. PetroChina Co climbed 1.4% to HK$11.54A measure for energy shares rose 1.6% on the MSCI Asia Pacific Index, as crude oil for August delivery rose as much as 0.4% to $95.30, adding to last week’s 4.2% increase. Prices are 32% higher through the past year.