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Asian Stocks Rise as U.S. Housing Data, ECB Debt Program Boost Growth Hope

Asian stocks rose this week, reversing three consecutive weeks of declines, after U.S. economic reports and eased concern over Europe’s sovereign debt crisis added to confidence in the global economic recovery.

Honda Motor Co., the Japanese carmaker which receives 80 percent of its sales abroad, gained 2.6 percent in Tokyo. James Hardie Industries SE, the biggest seller of home siding in the U.S., soared 16 percent in Sydney as the National Association of Realtors said purchases of existing homes in the U.S. unexpectedly jumped. HSBC Holdings Plc, Europe’s biggest bank, advanced 1.8 in Hong Kong after European government officials threw debt-strapped Ireland a lifeline.

The MSCI Asia Pacific Index rose 3.5 percent to 133.44 this week, reversing three consecutive weeks of declines. Reports in the U.S. showed consumer confidence rose to the highest level in five months in November and jobless benefits over the past month on average dropped to a two-year low.

“The economic data is clearly improving,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors Ltd., which manages about $93 billion and is a unit of AMP Ltd., Australia’s second-largest asset manager. “U.S. housing is showing signs of life and the employment trend is finally looking encouraging. The easing of European debt concerns is releasing a handbrake on markets.”

Regional Benchmarks

In Japan, the Nikkei 225 Stock Average gained 1.4 percent, its fifth straight weekly advance, while Australia’s S&P/ASX 200 Index climbed 2.1 percent.

South Korea’s Kospi index gained 2.9 percent this week, even as tensions escalated in the region following an attack by North Korea on South Korean soil on Nov. 23.

Hong Kong’s Hang Seng Index rose 1.9 percent. The Shanghai Composite Index retreated 1 percent, its fourth week of declines, as Fan Gang, a former adviser to the People’s Bank of China, said China may have room to further tighten monetary policy.

The country will shift to a “prudent” monetary policy from a “moderately loose” one that has been in place since late 2008, the state-run Xinhua News Agency said Dec. 3 after a meeting of the ruling Communist Party’s Politburo.

All 10 industry groups on the MSCI Asia Pacific Index rose this week, led by a 4.7 percent increase from information technology shares, followed by material companies.

Honda, Japan’s second-largest automaker by market value, gained 2.6 percent to 3,155 yen this week. James Hardie, which receives 71 percent of its revenue from the U.S., surged 16 percent to A$6.20. BHP Billiton Ltd., the world’s biggest mining company, advanced 3.2 percent to A$44.59.

U.S. Economy Rebounding

Reports in the U.S. this week showed existing home sales jumped, consumer spending and confidence rose and payrolls grew, adding to speculation earnings growth will outweigh China’s measures to tackle the fastest inflation in two years, and Europe’s fiscal deficit crisis will worsen.

The MSCI Asia Pacific Index has risen 10.8 percent this year, with stocks on the gauge valued at 14.6 times estimated earnings on average, compared with 23 times at the start of the year.

Pending sales of U.S. existing houses jumped by a record 10 percent in October, the National Association of Realtors said yesterday. That compares with a median estimate by 40 economists surveyed by Bloomberg for a 1 percent drop. Separate reports showed claims for jobless benefits over the past month on average dropped to a two-year low, and that November chain-store sales exceeded estimates.

Payrolls Expand

U.S. consumer confidence rose in November to the highest in five months. The Conference Board’s sentiment index increased to 54.1, exceeding the median forecast in a Bloomberg News survey, figures from the New York-based research group showed. The Institute for Supply Management-Chicago Inc. said its business gauge advanced to the highest since April.

A report from ADP Employer Services showed businesses added 93,000 workers to payrolls in November, more than the 70,000 expected by economists, based on the median of estimates compiled by Bloomberg.

“We are seeing promising signs in the economy and market sentiment is improving globally,” said Mitsushige Akino, who oversees about $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. “Improving sentiment should boost money flow into risk assets.”

HSBC Holdings, which receives 36 percent of its revenue in Europe, increased 1.8 percent in Hong Kong. Techtronic Industries Co., maker of Hoover vacuum cleaners and Ryobi power tools and receives 20 percent of its sales from Europe, jumped 9.6 percent to HK$9.11. Canon Inc., the world’s largest camera maker that gets about a third of its revenue from Europe, advanced 2.8 percent to 4,110 yen.

Ireland Bailout

In Europe, government officials meeting in Brussels on Nov. 28 threw Ireland an 85 billion-euro ($113 billion) lifeline and scaled back proposals to saddle bondholders with losses in future budget crises, seeking to reverse the market selloff menacing the euro.

Among other stocks that rose, Largan Precision Co., the Taiwanese maker of optical lens modules, surged 19 percent in Taipei on speculation it may be the sole lens supplier for the new version of Apple Inc.’s iPad. The stock posted the biggest increase on the MSCI Asia Pacific Information Technology Index this week.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; 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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