Asian Stocks, Currencies Climb on Intel Sales, Singapore Growth

By Lisa Pham and Frances Yoon

July 14 (Bloomberg) -- Asian stocks rose to a three-week high, and emerging-market currencies climbed after Intel Corp. reported record second-quarter sales and Singapore raised its 2010 economic growth forecast.

The MSCI Asia-Pacific Index gained 1.3 percent to 117.50 as of 4 p.m. in Tokyo, reaching the highest level since June 22. The Stoxx Europe 600 advanced 0.2 percent to 256.60. Futures for the Standard & Poor’s 500 Index increased 0.6 percent. The Korean won strengthened 0.8 percent to 1,202.33 per dollar, snapping a two-day drop. Rubber futures in Tokyo climbed as much as 2.9 percent on speculation that demand may increase.

Singapore said its economy will grow between 13 percent and 15 percent this year, adding to optimism in the world’s recovery after Greece sold bonds at a rate below what the country pays for European aid. Intel, the world’s biggest chipmaker, said third-quarter sales will be $11.6 billion, exceeding analyst estimates of $10.9 billion in a Bloomberg survey.

“The positive outlook for earnings is easing investors’ perception of risk,” said Tomomi Yamashita, a fund manager in Tokyo at Shinkin Asset Management Co., which oversees about $6 billion. “Economic growth needs to become sustainable. We are looking for strong economic data from the U.S.”

Advancing stocks beat decliners by 8 to 1 in the MSCI Asia Pacific Index and a gauge of technology stocks rallied 2.2 percent, the most among 10 industry groups. Japan’s Nikkei 225 Stock Average surged 2.7 percent, the biggest gainer among major indexes. South Korea’s Kospi jumped 1.3 percent.

Komatsu Forecast

Komatsu Ltd., the world’s second-largest maker of construction equipment, rallied 5.4 percent after raising its first-half net income forecast by 41 percent to 52 billion yen on rising demand from Asia and Latin America.

Samsung Electronics Co., Asia’s biggest semiconductor maker, and Hynix Semiconductor Inc. both gained more than 3.4 percent. Advantest Corp., the world’s largest maker of chip-testing equipment, leapt 5.7 percent. Intel shares climbed 7 percent in extended trading after the New York close yesterday.

“It’s hugely significant that Intel, which represents high-tech companies, should report stronger than estimated results,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc.

Profits for S&P 500 companies probably increased 34 percent in the April-June period, according to analysts’ estimates compiled by Bloomberg. Sales at U.S. retailers fell 0.3 percent in June following a 1.2 percent drop in May, according to the median estimate of 75 economists.

BHP, Rio

Commodity companies rose after the London Metal Exchange Index of six metals gained 1.1 percent yesterday, while crude oil futures jumped 2.9 percent. BHP Billiton Ltd., the world’s largest mining company and Australia’s largest oil producer, increased 2.1 percent in Sydney, while Rio Tinto Group, the world’s third-biggest mining company advanced 1.3 percent.

Oil fell from a two-week high in New York, dropping 0.1 percent to $77.07 a barrel, as investors sold contracts to lock in gains after an industry report showed U.S. crude inventories gained. Oil surged 7.2 percent from July 6 through yesterday on signs the global economic expansion will spur fuel demand following reports of second-quarter profits at U.S. companies. U.S. crude, distillate and gasoline stockpiles gained last week, the American Petroleum Institute said yesterday. The Energy Department will release its inventory report today.

“The market has gone up the past few days. It may be overbought so some short-term profit taking has come into the market and that will cap prices,” said Tetsu Emori, a commodity fund manager at Astmax Ltd. “If the DOE numbers follow the API, that will be a very bearish factor.”

Bond Risk

The cost of protecting Asia bonds from default fell to the lowest level in more than three weeks, according to traders of credit-default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan dropped 2 basis points to 122.5 basis points, according to ICAP Plc. That’s the lowest since June 21, according to CMA.

The yen weakened 0.1 percent to 112.99 per euro and the euro was little changed near a two-month high at $1.2701. The pound rallied to $1.5243, the highest since May 4, before trading at $1.5191. The Greek government sold 1.625 billion euros ($2.05 billion) of 26-week Treasury bills at a yield of 4.65 percent.

Bonds fell with the yield on Australian 10-year debt climbing five basis points to 5.16 percent and that on Indian notes rising two basis points to 7.64 percent. Treasury yields were at 3.12 percent, the highest level in two weeks before an auction of $13 billion of 30-year bonds today, the last of three sales this week totaling $69 billion.

“Robust profit reports reinforce risk sentiment, which was battered recently by concerns for a global recovery,” said Masahide Tanaka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s second-largest bank. “Revived risk sentiment will trigger a shift of allocation back into higher-yielding assets away from safer assets such as the yen.”

(bloomberg.com)