Asia: Stocks set to end strong week as Japan exporters advance

[SYDNEY] Asian stocks were on course to end a strong week as commodity producers drove gains following Chinese data and as investors concluded that Hillary Clinton maintained an edge over Donald Trump in the last US presidential debate.

The MSCI Asia Pacific Index fell 0.2 per cent to 139.96 as of 9.11am in Tokyo, tracking a retreat in US shares. Japan's Topix index swung, with exporters advancing amid expectations corporate earnings for the September quarter may not be as bad as expected with results beginning to trickle in amid a weaker yen.

The regional benchmark gauge has climbed 1.4 per cent this week with commodity producers leading the rally as data indicated Chinese economic growth is stabilising. With investors bracing for the US Federal Reserve to lift interest rates before the end of the year and a presidential election next month, companies from Microsoft Corp to Keppel Corp in Singapore are updating shareholders on profit performance.

Odds on the Fed raising rates by December have increased by about two percentage points over the past week, to 68 per cent, according to Fed funds futures tracked by Bloomberg.

"If you've been well invested over the last several years and you've made some big gains, it's sensible to bank some of those and have a neutral to defensive position," Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about US$7.2 billion, said by phone. "But unless something comes out of left field, the Fed will hike in December and that means the economy is on a solid footing and that's positive. As Microsoft shows, there are still some solid companies."

The earnings season in the US and Europe has so far been a mixed bag, with lacklustre earnings forecasts from Nestle SA and EBay Inc, while American Express Co and Deutsche Lufthansa AG had better-than-expected projections on Thursday.

Healthscope Ltd chalked the biggest decline on the MSCI Asia Pacific Index, tumbling 17 per cent, the biggest drop since listing in 2014. Australia's second-largest private-hospital operator said that first-quarter revenue growth at its hospitals unit was slower than expected.

Typhoon Haima is approaching Hong Kong after leaving at least seven dead in the northern Philippines. The city's weather office raised the No 8 warning, delaying the opening of the stock market, and closing government offices and schools until the storm has passed.

Australia's S&P/ASX 200 Index lost 0.1 per cent. South Korea's Kospi index retreated 0.3 per cent.

Earnings season in Japan ramps up next week, with more than 350 Topix companies set to report results, as attention shifts to whether Japan Inc. can overcome hurdles such as a stronger yen this year and patchy global growth. A recovery in raw-material prices, real estate and the services industry has turned an earnings-revision index, a measure compiled weekly by Daiwa Securities Group Inc that shows the number of analyst downgrades versus upgrades in current profit estimates, positive for the first time since January.

Futures on the S&P 500 Index were little changed after the underlying gauge retreated 0.1 per cent on Thursday. Microsoft surged as much as 5.8 per cent in after-hours trading after first-quarter sales and earnings topped analysts' estimates, buoyed by growing demand for cloud-based software and services.

Meanwhile, banks led European shares higher after European Central Bank President Mario Draghi said the central bank probably won't stop its asset buying abruptly.

Data on Chinese house prices is due Friday. New-home prices probably increased in more cities last month as buyers rushed in before further restrictions on purchases.

They gained in 64 of 70 urban areas tracked in August. Beijing has left efforts to cool market frenzy to local officials, who've imposed curbs in at least 21 municipalities.

BLOOMBERG