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Asia stocks rise on strong U.S. retail sales data; Nikkei rallies 1.4%

Published 10/16/2012, 03:41 AM
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Investing.com - Asian stock markets were broadly higher on Tuesday, with shares in regional exporters leading gains after official data showed that U.S. retail sales rose more-than-expected last month.

Speculation that Spain was moving closer to requesting a bailout further boosted appetite for riskier assets.

During late Asian trade, Hong Kong's Hang Seng Index added 0.25%, Australia’s ASX/200 Index ended up 0.2%, while Japan’s Nikkei 225 Index surged 1.4%.

The Commerce Department said Monday that retail sales rose by a seasonally adjusted 1.1% in September, beating expectations for a 0.8% increase. Retail sales in August were revised up to a 1.2% gain from a previously reported increase of 0.9%.

Core retail sales, which exclude automobile sales, rose by 1.1%, outstripping expectations for a 0.6% increase.

The upbeat data reinforced the view that the U.S. economy is improving, following September’s stronger-than-expected non-farm payrolls report released earlier in the month.

Meanwhile, the Wall Street Journal and Financial Times each cited an unnamed Spanish official in separate reports as saying Madrid is ready to request a credit line from the European Central Bank.

Market players have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.  

A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation.

But Spain has been reluctant to do so because it may come with conditions on its budget.

European Union policymakers will hold a two-day summit in Brussels starting on Thursday to discuss ways to firewall and extinguish the debt crisis as well as Greece's steps towards fiscal recovery.

In Tokyo, the Nikkei surged as exporters performed strongly, boosted by a softening yen, which increases the value of repatriated profits and helps lower prices of Japanese goods sold overseas.

Shares in consumer electronic firms Toshiba and Sony jumped 3.8% and 2.4% respectively, while automakers Toyota and Nissan rose 1.2% and 1% apiece.

Index heavyweight Softbank saw shares rally 9.6% after agreeing to acquire a controlling stake of U.S. mobile-firm Sprint Nextel for USD20 billion. Softbank shares are still down 18% since last Friday.

Elsewhere, in Hong Kong, the Hang Seng edged modestly higher, but gains were limited as investors looked ahead to Chinese third quarter growth figures due out on Thursday to gauge whether the world second largest economy is heading towards a hard or a soft landing.

Official data released Monday showed that Chinese consumer prices rose 1.9% in September from the year-ago period, in line with expectations and down from 2.0% in August, while producer price inflation fell 3.6%, also in line with expectations.

The data came after a report over the weekend showed that Chinese exports grew 9.9% on the year in September, above expectations for a 5.5% gain and increasing from 2.7% in August. Imports rose 2.4% from a year earlier, in line with expectations.

Meanwhile, in Australia, the benchmark ASX/200 Index eased up modestly in cautious trade, as advances in the big four banks countered losses in the mining sector.

Troubled surf-wear retailer Billabong saw shares tumble another 4.5%, a day after private equity firm TPG withdrew its AUD694 million takeover bid.

In Europe, regional markets were higher after the open. The EURO STOXX 50 rose 0.7%, France’s CAC 40 added 0.4%, London’s FTSE 100 eased up 0.4%, while Germany's DAX advanced 0.6%.

Later in the day, the euro zone was to release official data on consumer price inflation, while the ZEW Institute was to publish data on German economic sentiment. In addition, Spain and Greece are scheduled to hold auctions of government debt.

The U.S. was to release government data on consumer price inflation and industrial production.

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