Asian Stocks Advance on Hon Hai Earnings, China Manufacturing

Asian stocks rose, led by technology and mining companies, after Hon Hai Precision Industry Co. earnings beat estimates and China’s manufacturing expanded at the fastest pace in 16 months.

Hon Hai Precision Industry Co., the world’s largest contract maker of electronics, climbed 6.8 percent in Taipei as Goldman Sachs Group Inc. raised its share-price target. Samsung Electro-Mechanics Co., an electronic-parts maker, rose 9.5 percent in Seoul after Woori Investment & Securities Co. lifted its share-price estimate. Rio Tinto Group, the mining company that got 19 percent of its revenue in China last year, added 2 percent in Sydney.

The MSCI Asia Pacific Index rose 0.5 percent to 113.96 as of 1:41 p.m. in Tokyo. Two shares advanced for each one that fell on the gauge. Speculation of a global economic recovery drove the index to the highest in more than 10 months on Aug. 14. The measure has lost 0.2 percent since then.

“I don’t see why the stock market should collapse,” said Khiem Do, head of the multi-asset group at Baring Asset Management (Asia) Ltd. in Hong Kong, which holds $7 billion assets. “We are not looking at a reversal of the growth trend in China. Technology is among the sectors benefiting from this global recovery, particularly those in Taiwan and South Korea.”

China’s Shanghai Composite Index, which yesterday fell by the most since June 2008, added 0.5 percent. Hong Kong’s Hang Seng Index rose 0.6 percent.

Global Rally

Japan’s Nikkei 225 Stock Average gained 0.3 percent. Nippon Sheet Glass Co. rose 3.4 percent after the Nikkei newspaper said solar glass sales are rising. Clarion Co., a navigation-systems maker, rose 4.2 percent after the Nikkan Kogyo newspaper said the company took on more workers to meet orders.

Futures on the U.S. Standard & Poor’s 500 Index added 0.2 percent. The gauge dropped 0.8 percent yesterday amid concern the global rally in equities has outpaced the prospects for an economic recovery. The MSCI World Index sank 0.8 percent yesterday, the most since Aug. 17.

MSCI’s Asia Pacific measure rallied 61 percent from a more than five-year low on March 9 through yesterday. That lifted the average price of stocks on the index to 23.5 times estimated net income, higher than 17 times for the S&P 500, data compiled by Bloomberg show.

Hon Hai climbed 6.8 percent to NT$118.50. Second-quarter net income rose 27 percent to NT$15.1 billion ($459 million) from a year earlier. Hon Hai was expected to report profit of NT$11.7 billion, according to analyst estimates compiled by Bloomberg.