Asian Stocks Rise as Federal Reserve Expands Stimulus Measures; BHP Gains

Asian stocks rose, propelling a benchmark index to the highest level in more than two years, after the U.S. Federal Reserve expanded measures to boost the world’s largest economy. India’s Sensitive Index climbed to its highest close on record.

Canon Inc., which gets 27 percent of its sales in the Americas, jumped 2.9 percent in Tokyo. Hynix Semiconductor Inc. advanced 5.3 percent in Seoul on speculation chip prices will rise. BHP Billiton Ltd., the world’s biggest mining company, surged 2.6 percent in Sydney after Canadian regulators blocked its acquisition of Potash Corp. of Saskatchewan Inc. Coal India Ltd. surged 34 percent in its trading debut following the nation’s largest initial share sale.

The MSCI Asia Pacific Index rose 1.7 percent to 133.08 as of 8:32 p.m. in Tokyo, the highest level since July 24, 2008. About seven stocks advanced for every two that fell after the Fed said yesterday it will buy an additional $600 billion of Treasuries through June to bolster economic growth.

“The move to inject more money into the system is a massively important thing for markets,” said James Holt, who helps manage about $40 billion at BlackRock Investment Management (Australia) Ltd. “Every asset class gets a kick along. The recovery looks like it’s happening, but the overwhelming evidence is that it’s a weaker-than-expected recovery.”

Photographer: Haruyoshi Yamaguchi/Bloomberg

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Photographer: Haruyoshi Yamaguchi/Bloomberg

Asian stocks rose, propelling a benchmark index to the highest level in more than two years, after the U.S. Federal Reserve expanded measures to boost the world’s largest economy.

India’s Sensitive Index rose 2.1 percent to 20,893.57, still below its intraday record of 21,206.77 reached on Jan. 10, 2008. China’s Shanghai Composite Index climbed 1.9 percent. The Nikkei 225 Stock Average gained 2.2 percent in Japan, where markets resumed trading after a holiday yesterday.

Fed Purchases

Hong Kong’s Hang Seng Index jumped 1.6 percent as Goldman Sachs Group Inc. recommended buying developers. Australia’s S&P/ASX 200 Index rose 0.5 percent. Qantas Airways Ltd., the country’s largest airline, tumbled as much as 1.7 percent after engine failure forced one of its jets to return to Singapore.

Futures on the Standard & Poor’s 500 Index gained 0.6 percent. The index gained 0.4 percent to a six-month high yesterday as the Fed’s announcement drove banks higher. Bank of Japan policy makers convene today and tomorrow, following the Fed’s two-day meeting that ended yesterday.

Canon, the world’s largest camera maker, rose 2.9 percent to 3,780 yen in Tokyo. Electronics maker Sony Corp., which derives more than 20 percent of its sales in the U.S., climbed 0.5 percent to 2,641 yen. Toyota Motor Corp., the world’s biggest automaker, gained 2.3 percent to 2,910 yen.

U.S. Sales

“People perceive that the Fed’s decision will support valuations of risk assets,” said Tim Leung, who helps manage about $1.5 billion at IG Investment Ltd. in Hong Kong. Asian exporters may benefit “if this kind of policy has a marginal effect in encouraging more spending by U.S. consumers,” he said.

In Hong Kong, HSBC Holdings Plc gained 3.6 percent to HK$85.50. The bank, Europe’s largest, counts North America as its second-biggest market. Techtronic Industries Co., maker of Hoover vacuum cleaners and Ryobi power tools, jumped 7.3 percent to HK$8.70. The company got 73 percent of its first-half sales in North America.

Finance and technology companies accounted for 38 percent of the MSCI Asia Pacific Index’s advance today.

Hynix, the world’s second-largest computer-memory chipmaker, advanced 5.3 percent to 22,950 won in Seoul after the Nikkei newspaper reported that rival Elpida Memory Inc. plans to cut production. Elpida rallied 5.1 percent to 803 yen in Tokyo.

“We’re seeing growing signs that industry bottom is near, with rivals likely to cut production or investments amid deteriorating cash flow, and that’s boosting Hynix shares,” said Kim Young Chan, an analyst at Shinhan Investment Corp.

Hostile Bid

The MSCI Asia Pacific Index increased 8.7 percent this year to yesterday, compared with gains of 7.4 percent by the S&P 500 and 5 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.5 times estimated profit, more than 14.1 times for the S&P 500 and 12.2 times for the Stoxx 600.

BHP Billiton surged 2.6 percent to A$43.72 in Sydney. Canada blocked its $40 billion hostile bid for Potash Corp., saying a sale of the world’s largest fertilizer company wouldn’t provide a “net benefit” to the country.

“The market saw the long-term benefits of this deal, but its failure creates opportunities for BHP’s surplus cash,” said BlackRock’s Holt.

Coal India, the world’s No. 1 producer of the fuel, surged 40 percent to 342.55 rupees after selling 152 billion rupees ($3.4 billion) of shares at the top of a price range offered to investors.

‘Chasing Growth’

The Sensitive Index, or Sensex, has surged 30 percent since May 25 and is the best performer this year among the world’s 10 biggest stock markets. Foreign fund inflows have surged 80 percent, helping to absorb Coal India’s share sale and making the Sensex the most expensive benchmark index in Asia.

“Money is chasing growth,” said Sankaran Naren, chief equities investment officer at ICICI Prudential Asset Management Co., which manages $15.8 billion.

In Hong Kong, Sino Land Co., among Goldman Sachs’ top picks, surged 6.1 percent to HK$18.10 in Hong Kong. New World Development Co. climbed 4.7 percent to HK$16.98. Goldman Sachs forecast “another round of strong property sales to boost developers’ performance,” a report today said.

Tokyo-based Mitsubishi UFJ Financial Group Inc. rose 1.1 percent to 371 yen. The Japanese bank is negotiating with Royal Bank of Scotland Group Plc and the U.K. government to buy project-finance assets valued at about 4 billion pounds ($6.4 billion), two people with direct knowledge of the matter said.

Engine Failure

Fast Retailing Co., Asia’s biggest clothing chain operator, jumped 8.1 percent to 11,700 yen for the MSCI Asia Pacific Index’s second-biggest advance. The company’s Uniqlo chain posted its smallest domestic sales decline in three months.

Sydney-based Qantas gained 0.7 percent to A$2.89, rallying from its earlier slump, after the Airbus SAS A380 jet landed safely in Singapore. The plane took off from the city-state and an explosion occurred while it was flying over Indonesia’s Batam island, Bambang Ervan, a spokesman at the Indonesian transport ministry, said. Some news reports earlier said that the plane had crashed.

“It’s never good to see these sorts of situations develop and it highlights the risk of holding one of the airline stocks,” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “You never know when anything can happen. People always sell first and ask questions later.”

To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net.

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net.

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