Asian stocks headed for their longest winning streak since March and credit risk fell as manufacturing indicators in Japan and China beat forecasts and European leaders agreed on measures to ease the debt crisis. The euro weakened and oil declined after rallying last week.
The MSCI Asia Pacific Index added 0.4 percent in its fourth day of gains as of 12:09 p.m. in Tokyo. Futures on the Standard & Poor’s 500 Index slipped 0.2 percent. The euro dropped against most of its major peers after gaining 1.8 percent against the dollar June 29. Oil in New York sank 1.1 percent to $84.07 a barrel after surging the most in three years. Corn in Chicago rose to the highest since September. The Markit iTraxx indexes tracking credit-default swaps for Asia ex-Japan, Japan and Australia all fell.
Japan’s Tankan index of large manufacturers’ sentiment and China’s Purchasing Managers’ Index exceeded economist estimates, while a reading today may show factory activity in the euro zone contracted for an 11th month. Global equities rallied the most this year on June 29 as European leaders eased aid requirements for Spain and Italy. Stocks staged the biggest June rally since 1999, giving equity investors bigger gains for the first half than the dollar, bonds and commodities.
“We have been adding risk,” said Hugh Young, who helps manage $70 billion in Asian equities at Aberdeen Asset Management Asia Ltd. in Singapore. “Nobody’s overly optimistic about economic growth but they are realistic. We are bumping along the bottom and this is quite healthy given where we’ve been.”
Japan’s Nikkei 225 Stock Average rose 0.2 percent and the Topix Index was up 0.1 percent. The nation’s quarterly Tankan index was minus 1 in June from minus 4 in March, the central bank said today. Economists surveyed by Bloomberg News expected a reading of minus 4, and a negative number means pessimists outnumber optimists.
South Korea’s Kospi index increased 0.1 percent after data yesterday showed exports in June snapped three months of declines. Australia’s S&P/ASX 200 Index rose 1.2 percent. China’s Shanghai Composite Index slid 0.2 percent, even as two stocks gained for every one that fell. The Hong Kong market is closed today for a holiday.
China’s PMI fell to 50.2 in June from 50.4 in May, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing reported yesterday. That compares with the 49.9 median estimate in survey of 24 economists. A final PMI reading for June by HSBC Holdings Plc and Markit Economics today was better than a preliminary level published last month.