By Shani Raja
May 10 (Bloomberg) -- Asian stocks rose as improving earnings among Japanese companies tempered concern that Europe?s sovereign debt crisis will hold back a global economic recovery.
Sumitomo Heavy Industries Ltd. surged 12 percent in Tokyo after surpassing its full-year profit forecast by 27 percent. Toshiba Corp. gained 3.7 percent after saying earnings will climb to a record. Nintendo Co., a video-game console maker that gets a third of its revenue from Europe, lost 1.6 percent in Osaka after Standard & Poor?s cut Greece?s credit rating by two levels. Billabong International Ltd., which gets about a fifth of its sales from the region, dropped 1.2 percent in Sydney.
?Greece is a continuing source of irritation for the investment community,? said Prasad Patkar, who helps manage about $1.8 billion at Platypus Asset Management Ltd. in Sydney. ?I don?t think Greece?s problems will derail the economic recovery.?
The MSCI Asia Pacific Index rose 0.2 percent to 137.89 as of 7:13 p.m. in Tokyo. About the same number of stocks advanced as fell.
Japan?s Nikkei 225 Stock Average rose 0.3 percent. The benchmark index reversed losses after the Nikkei reported on its website that Toyota Motor Corp.?s output may return to normal sooner than expected.
Australia?s S&P/ASX 200 Index fell 0.7 percent ahead of the country?s national budget, scheduled to be handed down tonight in Canberra. New Zealand?s NZX 50 Index increased 0.3 percent. Markets in Hong Kong and South Korea were shut today.
Futures on the Standard & Poor?s 500 Index declined 0.4 percent today. In New York, the index gained 0.5 percent to 1,346.29 yesterday, advancing for a second straight day, as commodity prices rebounded from the biggest weekly drop since 2008 and McDonald?s Corp., the world?s No. 1 restaurant chain, rallied after sales topped estimates.
Japan Earnings
Sumitomo Heavy jumped 12 percent to 597 yen in Tokyo after the maker of heavy electric machinery booked 27.9 billion yen ($347 million) in full-year net income, beating its forecast by 27 percent. The company estimated that profit will rise 7.4 percent this year.
Toshiba Corp., the world?s No. 2 maker of flash-memory chips, gained 3.7 percent to 451 yen after saying earnings will climb to a record as demand for storage chips offsets the impact of Japan?s March 11 earthquake and tsunami.
Mitsui Mining & Smelting Co. surged 7.1 percent to 302 yen. The metals producer reported 21.2 billion yen in net income for the year ended March 31, up 52 percent from what it earned a year earlier. The company forecast a 17 percent drop in profit to 17.5 billion yen this year.
Toyota Recovers
Toyota Motor Corp. reversed losses and climbed 1.7 percent to 3,250 after the Nikkei newspaper reported that a recovery in the supply of parts meant the world?s largest carmaker expected to resume full production in November or December.
The MSCI Asia Pacific Index fell less than 0.1 percent this year through yesterday, compared with gains of 7.1 percent by the S&P 500 and 1.7 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.5 times estimated earnings on average, compared with 13.6 times for the S&P 500 and 11.3 times for the Stoxx 600.
Nintendo lost 1.6 percent to 19,120 yen in Osaka. Billabong, the world?s biggest surfwear maker, dropped 1.2 percent to A$6.65 in Sydney.
Rating Cut
Concern over Europe?s sovereign debt crisis deepened after Greece?s credit rating was cut to B from BB- by Standard & Poor?s, which said further reductions were possible as the risk of default rises. Moody?s Investors Service yesterday placed Greece?s B1 rating on review for a downgrade.
The yen appreciated to as high as 114.98 against the euro today in Tokyo, compared with 115.97 at the close of stock trading yesterday. Against the dollar, Japan?s currency strengthened to 80.43 from 80.63. A stronger yen reduces overseas income at Japanese companies when converted into their home currency.
?The Greek debt-rating cut will likely again boost concerns about the country?s deteriorating finances and the yen?s strength,? said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co, speaking about Japan.
--With assistance from Norie Kuboyama and Toshiro Hasegawa in Tokyo. Editors: John McCluskey, Nick Gentle.
To contact the reporters on this story: Shani Raja in Sydney at sraja4@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
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