Asian Stocks Rise, Set for Second-Biggest Weekly Gain This Year

Asian Stocks Rise, Set for Second-Biggest Weekly Gain This Year

By Patrick Rial and Saeromi Shin

Nov. 28 (Bloomberg) — Asian stocks rose, driving the region’s benchmark index to its second-best week this year, on optimism steps by governments to pull the world’s economy out of recession will boost demand for raw materials and heavy equipment.

BHP Billiton Ltd., Australia’s largest oil producer, added 7.6 percent as crude headed for the best week in five months. Komatsu Ltd. jumped 6.9 percent in Tokyo on speculation demand for its excavators will increase in China, which lowered interest rates this week. The cost of protecting bonds from default in the region fell.

“Sentiment is stabilizing,” said Kwon Hyeuk Boo, a fund manager at Daishin Investment Trust Management Co. in Seoul, which oversees about $1.4 billion in assets. “Investors are buying into expectations that support measures will keep coming. China’s strong will to support its economy is serving as a key catalyst to Asian markets.”

The MSCI Asia Pacific Index advanced 1.5 percent to 82.71 at 5:33 p.m. in Tokyo. The measure has rallied 6.8 percent this week, a performance only beaten this year by the 6.9 percent rally at the end of October, when central banks from Japan to Taiwan lowered borrowing costs.

China’s central bank cut interest rates by the most in 11 years, three weeks after the government announced a stimulus plan worth more than $500 billion. The Federal Reserve committed $800 billion to unfreeze credit markets, while Citigroup Inc. received a $306 billion government rescue and the European Union proposed a 200 billion euro ($258 billion) spending package.

The gain pared November’s drop to 3.8 percent, the seventh monthly decline and the longest losing streak since the gauge began in December 1987.

Panasonic Earnings

The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan, including the Thai government and Hutchison Whampoa Ltd., fell 2.5 basis points to 365 at 12:45 p.m. in Hong Kong.

Japan’s Nikkei 225 Stock Average added 1.7 percent to 8,512.27 today. Gains were limited as Panasonic Corp. slumped to a five-year low after slashing its profit outlook as the country’s recession deepened. U.S. markets were closed yesterday for the Thanksgiving holiday.

India’s Sensitive Index dropped 0.3 percent as stocks traded for the first time since militant attacks that started on Nov. 26 in Mumbai left as many as 125 people dead. Hotel operators and airlines led declines.

“The aim of the attackers will have been to deter foreign businessmen and indeed foreign fund managers from visiting India,” CLSA Ltd.’s chief strategist Christopher Wood wrote in a report. “Sadly, those efforts will in part be successful.”

Commodity Producers

BHP rose 7.6 percent to A$31. Rio Tinto Group jumped 8.8 percent to A$46.60 after Morgan Stanley resumed coverage of the world’s third-largest mining company with an “overweight” rating. Mitsui & Co., which generates the most profit from oil among Japan’s trading companies, advanced 8.3 percent to 846 yen. more


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