Asian stocks rose the most this year, led by Newcrest Mining Ltd. and Jiangxi Copper Ltd., after surging demand drove prices of metals to records.
Takeda Pharmaceutical Co. led drugmakers higher as investors sought shares least affected by an economic slowdown, driving a gauge of health-care companies to its biggest gain in four months. Lawson Inc. and FamilyMart Co. rose after the Japanese operators of convenience-store chains posted higher sales.
“The boom on commodities has provided investors an excuse for buying into metal shares, which are one of the market favorites now,” said Lu Yizhen, who helps manage the equivalent of $640 million at Citic-Prudential Fund Management Co. in Shanghai.
The MSCI Asia Pacific Index climbed 0.9 percent to 154.47 as of 3:23 p.m. in Tokyo, erasing earlier losses of as much as 0.7 percent. The benchmark was set for its biggest advance since Dec. 31. Japan’s Nikkei 225 Stock Average added 0.5 percent to 14,599.16.
Automakers fell, led by Honda Motor Co., after a bigger- than-forecast drop in U.S. home sales added to concern that Asia’s largest export market may slip into recession. National Australia Bank Ltd. paced declines among banks after Merrill Lynch & Co. said Citigroup Inc. may face additional writedowns.
U.S. stocks retreated yesterday, sending the Standard & Poor’s 500 Index to the lowest level since March.
Newcrest jumped 6.6 percent to A$39.28, a record. Sumitomo Metal Mining Co., Japan’s biggest gold producer, rose 5 percent to 1,907 yen. Zijin Mining Group Co., owner of China’s largest gold mine, advanced 3.3 percent to HK$13.20 in Hong Kong.
Gold for immediate delivery climbed to a record $882.55 an ounce recently as a weakening dollar sparks demand for alternative assets. Platinum also climbed to a high, and copper gained in Shanghai by the exchange-imposed daily limit. Gold and copper are having their best start to the year since at least 1980, according to analysts including commodity broker Okachi & Co.’s Takaki Shigemoto.
Jiangxi Copper, China’s second-largest producer of the metal, advanced 4.2 percent to HK$19.68. Nippon Mining Holdings Inc., which controls Japan’s biggest copper smelter, added 3.5 percent to 714 yen.
Takeda, Japan’s largest drugmaker, rose 3 percent to 6,480 yen. Astellas Pharma Inc., the nation’s second-biggest, added 3.5 percent to 4,690 yen, snapping a four-day, 7.6 percent decline.
Health Stocks Rally
The MSCI Asia-Pacific Health Care Index jumped 2.2 percent today, the biggest advance since Sept. 7. Drug stocks led gains in Europe yesterday and were the only one of 10 industry groups to rise in the S&P 500.
Toyama Chemical Co. surged 106 percent to 735 yen after saying studies of a potential flu drug are progressing. Nichi-iko Pharmaceutical advanced 6.5 percent to 2,625 yen after Goldman, Sachs & Co.’s Kyoko Sato rated the stock “buy” in new coverage.
Lawson jumped 5.9 percent to 3,930 yen, its first advance since Dec. 20. FamilyMart, Japan’s third-largest convenience- store chain, rose 5.2 percent to 3,460 yen.
Lawson and FamilyMart, which are gaining market share from supermarkets, both reported a 6.9 percent increase in nine-month revenue yesterday. Total sales at Japan’s convenience stores have risen for the past five months as operators open new outlets and increase commissions from automatic-teller machines.
Shares of Honda Motor and Hyundai Motor Co. declined after the National Association of Realtors said pending U.S. home sales fell 2.6 percent in November, reinforcing concern that U.S. demand for imports will wane.
“It gets worse by the day,” said Hans Kunnen, who helps manage $128 billion at Colonial First State Global Asset Management in Sydney. “There is a growing possibility of a mild recession.”
Honda Motor, Japan’s second-largest automaker, fell 0.9 percent to 3,480 yen. Hyundai Motor, South Korea’s biggest, declined 0.4 percent to 68,800 won.
Lenovo Group Ltd., the world’s No. 3 maker of personal computers, slumped 11 percent to HK$5.86, the biggest loss in 14 months. The company’s profit for the year ending March 2009 may be 31 percent less than previously estimated on lower sales and rising costs, CLSA Ltd. analyst Jenny Lai said. She cut her rating on the stock to “sell.”
National Australia Bank, the country’s second-biggest provider of mortgages, lost 1.2 percent to A$35.59. HSBC Holdings Plc, Europe’s largest bank by market value, declined 0.6 percent to HK$127.50 in Hong Kong.
Citigroup, the biggest U.S. bank, may be forced to write down $16 billion in the fourth quarter, Merrill Lynch analyst Guy Moszkowski said in a note. He almost doubled his estimate for Citigroup’s loss.
Commonwealth Bank Raises Interest Rate on Home Loans
Commonwealth Bank of Australia raised its variable interest rate on mortgages to recoup higher funding costs, the third major Australian bank to increase borrowing costs in the past week without any action from the central bank.
Commonwealth Bank, the nation’s second-largest, will raise the rate for new and existing variable home loans by 0.1 percentage point to 8.67 percent from Jan. 11, it said today in a statement to the Australian Stock Exchange. The bank also lifted its rate for variable business loans by 0.15 percentage points.