Asian Stocks Rise on Australian GDP; Aussie, Oil Gain - Bloomberg Asian Stocks Rise on Australian GDP; Aussie, Oil Gain - Bloomberg

Tuesday, June 5, 2012

Asian Stocks Rise on Australian GDP; Aussie, Oil Gain - Bloomberg

Asian Stocks Rise on Australian GDP; Aussie, Oil Gain - Bloomberg

Asian stocks gained for a second day while the Australian dollar and oil advanced after the southern country’s economy expanded at twice the rate economists estimated and the U.S. services-industry unexpectedly grew. Aluminum rose as metals in London traded for the first time this week.

The MSCI Asia Pacific Index (MXAP) added 0.6 percent at 10:56 a.m. in Tokyo. The Nikkei 225 Stock Average climbed 0.7 percent. Standard & Poor’s 500 Index futures advanced 0.4 percent. The so-called Aussie strengthened 1.1 percent against the U.S. dollar, poised for the biggest gain in almost two months, after a report showed the nation’s economy grew 1.3 percent last quarter. Oil rose 0.6 percent in New York. Aluminum increased 0.6 percent following a two-day holiday in the U.K.

Australia’s gross domestic product advanced 1.3 percent from the previous three months, a Bureau of Statistics report showed, compared with the median 0.6 percent gain predicted by economists in a Bloomberg News survey. U.S. service industries sustained their pace of growth in May, showing the biggest part of the U.S. economy is withstanding the impact of the European debt crisis.

The Group of Seven nations yesterday agreed to coordinate their response to Europe’s turmoil, which has tipped at least eight of the 17 euro-area economies into recession and damped European demand for foreign goods. European representatives “said they will speed up their efforts to resolve those problems, which was encouraging to us,” Japanese Finance Minister Jun Azumi told reporters in Tokyo.

Stock Valuations

The MSCI Asia Pacific Index trades at 11.2 times its companies’ estimated earnings, the lowest valuation since October 2008, weekly data compiled by Bloomberg show. The gauge plunged 15 percent from a six-month high in February through June 4 as U.S. economic data trailed estimates and concern grew about Greece’s future in the euro and Spain’s deteriorating national finances.

The Institute for Supply Management’s index of non- manufacturing businesses, which covers about 90 percent of the economy, unexpectedly increased to 53.7, topping the median projection of economists for a reading of 53.4.

Spain may receive a precautionary credit line from the European Financial Stability Facility, Germany’s Die Welt newspaper reported in a preview of a story that will run today, citing unidentified people familiar with talks about the possible option.

Commerzbank AG, Germany’s second-largest bank, had its credit rating cut one level today as Europe’s debt crisis prompted Moody’s Investors Service to downgrade seven lenders in the nation and three in Austria. Commerzbank, based in Frankfurt, was reduced to A3 from A2, Moody’s said in a statement. A review of Deutsche Bank AG, the nation’s largest lender, will be concluded later, Moody’s said.

To contact the reporter on this story: Richard Frost in Hong Kong at

To contact the editor responsible for this story: Nick Gentle at

Enlarge image Asian Stocks Rise on U.S. Data, Spain Optimism

Asian Stocks Rise on U.S. Data, Spain Optimism

Asian Stocks Rise on U.S. Data, Spain Optimism

Tomohiro Ohsumi/Bloomberg

A pedestrian walks past an electronic stock board displaying the Nikkei 225 Stock Average outside a securities firm in Tokyo.

A pedestrian walks past an electronic stock board displaying the Nikkei 225 Stock Average outside a securities firm in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

June 6 (Bloomberg) -- Atul Lele, Sydney-based equity strategist at Credit Suisse Group AG, talks about Australia stocks, the nation's currency, and his investment strategy. Lele also discusses Europe's sovereign debt crisis. He speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

June 6 (Bloomberg) -- Shane Oliver, chief economist and head of investment strategy at AMP Capital Investors Ltd., talks about Australia's economy and central bank monetary policy. The economy in Australia expanded at more than twice the pace economists forecast last quarter, driven by household spending and engineering construction. Oliver speaks from Sydney with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

US STOCKS-Wall St flat as euro-zone worries offset ISM data - Reuters UK

Tue Jun 5, 2012 5:21pm BST

* U.S. ISM services index slightly above forecasts

* Euro zone's major economies in decline -surveys

* Dow off 0.1 pct, S&P 500 and Nasdaq flat (Updates to midday)

By Chuck Mikolajczak

NEW YORK, June 5 (Reuters) - U.S. stocks treaded water on Tuesday as investor angst about the euro zone's fiscal crisis offset data showing the U.S. economy's services sector grew slightly faster than expected in May.

The pace of growth in the U.S. services sector picked up in May as a gauge of new orders improved, according to an industry report released on Tuesday. The Institute for Supply Management's services index edged up to 53.7 in May from 53.5 in April, a touch above economists' forecast for it to hold steady.

The ISM data was a welcome change from recent economic reports, which coupled with concerns about the euro zone, drove the S&P 500 down more than 6 percent for May.

"The non-manufacturing ISM number was certainly a welcome bit of good news in that it beat expectations and shows the service side of the economy is still expanding," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

"It's an event-driven, data-driven market right now so while there is always a focus on the data points, because of the situation we are in, there is an inordinate amount of attention being paid to them."

Concerns about an escalation of the euro zone's debt crisis kept a weight on the market, however, and served to cap gains.

Spain's Treasury Minister Cristobal Montoro said the nation's high borrowing costs mean it is effectively shut out of the bond market and the European Union should help Madrid recapitalize its debt-laden banks.

Statements on the outcome of emergency talks among the Group of Seven industrialized nations as they tackle the euro zone's deepening crisis offered little clarity to investors. The Treasury Department said G7 finance ministers "reviewed developments in the global economy and financial markets and the policy response under consideration."

Japan's finance minister said he told G7 members that Japan is confident in Europe's response to its problems, but indicated Tokyo was prepared to intervene in order to curb its currency.

The Dow Jones industrial average dropped 14.30 points, or 0.12 percent, to 12,087.16. The Standard & Poor's 500 Index inched up just 0.02 of a point, or unchanged on a percentage basis, at 1,278.20. The Nasdaq Composite Index was unchanged at 2,760.01.

In the euro zone, most major economies are now in various states of decline, according to business surveys that suggested even Germany is no longer immune to the crisis.

The S&P financial sector index rose 1.3 percent, leading gains among the 10 major S&P 500 sectors. The financial sector index, however, is down more than 12 percent since the start of May.

Shares of JPMorgan Chase & Co rose 3.3 percent to $32.01, while Bank of America Corp added 2.6 percent to $7.08 and Citigroup advanced 3 percent to $25.56.

On the downside, Dollar General Corp shares dropped 3.1 percent to $46.99 after the company said key shareholders plan to sell up to 25 million shares. (Reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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