July 22 (Bloomberg) -- Most Asian stocks rose, giving the MSCI Asia Pacific Index its longest streak of gains since January, as Shin-Etsu Chemical Co. sought to raise prices and BHP Billiton Ltd. pumped a record amount of crude oil.

Shin-Etsu, the world’s largest maker of silicon wafers, climbed 4.9 percent in Tokyo after saying its unit will start talks with chipmakers to boost prices. BHP, Australia’s biggest oil and gas producer, gained 2 percent as new fields helped fourth-quarter output reach an all-time high. Stocks pared gains in the afternoon as Morgan Stanley advised investors to “sell into” the global rally in equities.

Five stocks advanced for every four that fell on the MSCI Asia Pacific Index, which added 0.1 percent to 106.69 as of 7:27 p.m. in Tokyo. The gauge climbed 8.8 percent in the past seven days and has surged 51 percent from a five-year low on March 9 on speculation stimulus policies worldwide will boost global growth. The index pared an earlier 0.6 percent advance.

“The market’s taking a bit of a breather after a pretty strong rally,” said Matt Riordan, who helps manage about $3.2 billion at Paradice Investment Management in Sydney. “The underlying economy is better than people anticipated and the market is pricing for a recovery.”

China’s Shanghai Composite Index rose 2.6 percent, the most in Asia today, to a 13-month high. China Petroleum & Chemical Corp. jumped 10 percent after Nomura Holdings Inc. said the company’s first-half net income may more than triple.

Japan’s Nikkei 225 Stock Average advanced 0.7 percent. Nippon Signal Co., which makes traffic signals, jumped 12 percent in Tokyo, while Nexen Tire Corp. climbed 6 percent in Seoul as brokerages set higher target prices for the stocks.

‘Tentative Signs’

Westpac Banking Corp. lost 2.4 percent, pacing gains among financial companies, as National Australia Bank Ltd. announced a share sale to help it weather bad loans. Hong Kong’s Hang Seng Index sank 1.3 percent, erasing a 0.7 percent advance.

Futures on the U.S. Standard & Poor’s 500 Index fell 0.5 percent. The gauge gained 0.4 percent yesterday as Federal Reserve Chairman Ben S. Bernanke said the country’s economy is showing “tentative signs of stabilization.”

After markets closed, Apple Inc. became the latest U.S. company to report better-than-expected profit. Hon Hai Precision Industry Co., which assembles Apple’s iPhone, gained 2.3 percent to NT$113.5 in Taipei.

Shin-Etsu Chemical climbed 4.9 percent to 4,740 yen, while closest rival Sumco Corp. rose 4.6 percent to 1,579 yen in Tokyo.

Shin-Etsu Chemical said today Shin-Etsu Handotai Co., its wholly owned subsidiary, will start negotiations with chipmakers to raise prices for silicon wafers. The Nikkei newspaper earlier said the company will seek a price increase of as much as 40 percent.

Investor Survey

Toshiba Corp., Japan’s biggest chipmaker, jumped 5 percent to 378 yen. Apple paid $500 million to Toshiba for flash memory chips, according to the transcript of Apple’s earnings teleconference.

Optimism for a rebound in corporate profits helped drive the MSCI World Index up by 6.6 percent in the week through yesterday. The first Quarterly Bloomberg Global Poll of financial investors and analysts showed more than a third of investors see greater opportunity and are taking more risk. Two- thirds of respondents say they are optimistic about India’s prospects, as are 70 percent on China.

India’s finance ministry said on July 2 the nation’s economy may grow by as much as 7.75 percent this year. China said last week its second-quarter gross domestic product expanded 7.9 percent from a year earlier, accelerating from its slowest growth in almost a decade.

Sinopec, BHP

Materials stocks posted the biggest gains among the MSCI Asia Pacific Index’s 10 industry groups today. The group is the gauge’s second-best performer this year amid speculation an economic rebound will boost commodities demand.

BHP, the world’s biggest mining company, added 2 percent to A$36.90. Fourth-quarter oil production rose 4 percent from a year earlier.

“People are snapping up companies that are sensitive to the global economy in anticipation of an earnings recovery,” said Hiroshi Fujimoto, a fund manager at Tokyo-based Shinkin Asset Management Co. in Tokyo, which manages the equivalent of $5.7 billion. “It’s getting more certain the U.S. is bottoming out, while China is firming up ground through large-scale public spending to accelerate its growth.”

China Petroleum, known as Sinopec, rose 10 percent to 13.38 yuan following Nomura’s prediction on earnings. The company, China’s No. 1 refiner, is scheduled to report first-half earnings on August 24.

Nippon Signal, Nexen

Nippon Signal surged 12 percent to 904 yen in Tokyo. Nomura rated the stock a new “buy” with a price estimate of 1,000 yen, saying railway upgrade projects overseas will increase demand for the company’s products. Rival Kyosan Electric Manufacturing Co. gained 9.9 percent to 411 yen.

Nexen climbed 6 percent to 6,500 won after a surge in second-quarter profit prompted Good Morning Shinhan Securities Co. and Korea Investment & Securities Co. to raise their share- price estimates.

In Sydney, Westpac, Australia’s second-biggest bank by market value, fell 2.4 percent to A$19.82, while Commonwealth Bank of Australia lost 1.6 percent to A$39.10.

National Australia Bank said it will raise A$2.75 billion ($2.24 billion) from selling equity to help it weather rising bad loans and finance potential acquisitions. The lender’s shares were halted from trading today.

Japanese Developers

The MSCI Asia Pacific Index narrowed its advance in the afternoon session as a Morgan Stanley report spurred concerns about the pace of the stock rally. The average valuation of companies in the MSCI Asia Pacific Index has risen to 24 times estimated net income, higher than the S&P 500’s 16 times and 14 times for Europe’s Dow Jones Stoxx 600 Index.

“Cyclical growth risks have diminished but not disappeared,” strategists including Jason Todd wrote in a report. “The key drivers behind improving sentiment, upside to near-term growth estimates and continued positive earnings momentum, may prove more transitory than the market believes.”

Property developers were the biggest drag on Japan’s Topix Index today on concern the country’s economy won’t stage a quick recovery. NTT Urban Development Corp. slumped 4.5 percent to 88,800 yen. Tokyo Tatemono Co. lost 2.6 percent to 457 yen.

“Real estate is among the industries hardest hit by the recession,” said Kiyoshi Ishigane, a senior strategist at Tokyo-based Mitsubishi UFJ Asset Management Co., which oversees about $52 billion.

Tokyo Tatemono President Makoto Hatanaka said in an interview with the Nikkei published July 20 that Japan’s economy will not have a “V-shaped” recovery and office vacancy rates are likely to continue rising outside of Tokyo.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.

Last Updated: July 22, 2009 06:29 EDT