Bin Laden death news gives boost to Asian markets

TOKYO - Asian stocks rose on Monday, driving the regional benchmark index to the highest level in almost four months after US companies reported earnings that topped analysts' estimates and after US President Barack Obama confirmed the death of Osama bin Laden.

Komatsu Ltd advanced 2.7 percent after Caterpillar Inc posted earnings that beat estimates. Seiko Epson Corp, a Japanese printer maker, rose 4.4 percent after the forecast that its net income will jump 66 percent this fiscal year.

GS Engineering & Construction Corp, a South Korean builder, jumped 1.9 percent in Seoul after the government announced policy measures to aid troubled builders and boost the property market.

The MSCI Asia Pacific Index increased 0.6 percent to 140.25 at 1:17 pm in Tokyo, the highest level since Jan 19. Almost three stocks rose for each that fell on the gauge. The measure climbed 0.5 percent last week after the Federal Reserve renewed its pledge to stimulate growth in the United States, the world's biggest economy, with low interest rates, boosting the outlook for exporters.

"The death of bin Laden eases some concern, but it's hard to imagine it'll lead to a reduction of risk in the Middle East, and so the market's reaction may be transitory," said Koichiro Nishio, a market analyst in Tokyo at SMBC Nikko Securities Inc.

"The recovery of demand in the US and other developed countries means a better environment for earnings."

Japan's Nikkei 225 Stock Average rose 1.5 percent to the highest level since the March 11 earthquake and tsunami.

Japanese shares extended gains when the yen weakened against the dollar following the news of Osama bin Laden's death.

South Korea's Kospi Index added 1.3 percent. New Zealand's NZX 50 Index slipped 0.4 percent. Australia's S&P/ASX 200 Index lost 0.6 percent, reversing an earlier gain of 0.3 percent, after the nation's currency rose above $1.10 for the first time since foreign-exchange controls were scrapped in 1983.

Australia's manufacturing sector contracted in April for the seventh time in eight months as a record-high currency and consumer caution hurt textile and other producers, a report showed on Monday.

Futures on the Standard & Poor's 500 Index advanced 0.8 percent today, reversing an earlier 0.2 percent decline, as US President Barack Obama said Osama bin Laden was dead.

Osama bin Laden, who used his family inheritance to build a global terrorist network that killed almost 3,000 people in the Sept 11, 2001, attacks targeting New York and Washington, was killed in a US military strike, according to President Barack Obama.

Bloomberg News

(China Daily 05/03/2011 page17)