Asian stocks rose, sending a regional index toward its biggest four-day advance since March 2009, as Chinese lenders surged after a state-owned investment company bought bank shares and Japanese equities climbed on resuming trade from a holiday.
Bank of China Ltd. (3988) surged 7.7 percent in Hong Kong after Central Huijin Investment Ltd. said it began buying shares of the four biggest national banks. Cnooc Ltd. (883), China’s No. 1 offshore oil explorer, climbed 3.9 percent as a pledge by Germany and France to support Europe’s banks spurred commodity prices. Mitsubishi Corp. (8058), the Japanese trading company that gets about 43 percent of sales from commodities, gained 1.8 percent in Tokyo. Sony Corp. (6758), Japan’s largest exporter of consumer electronics, jumped 5.7 percent.
The MSCI Asia Pacific Index gained 1.7 percent to 115.64 as of 7:25 p.m. in Tokyo as commodity prices also advanced after German Chancellor Angela Merkel and French President Nicholas Sarkozy pledged at the weekend to deliver a plan to recapitalize the Europe’s banks and address Greece’s debt crisis by Nov. 3. More than four stocks rose for each that fell on the gauge.
“There is hope that if a comprehensive European bank package is announced, the damage to the real economy will be less than currently expected,” said Belinda Allen, a senior investment analyst at Colonial First State Global Asset Management in Sydney, which oversees about $145 billion. “That would be better news for global growth and commodity demand.”
The MSCI Asia Pacific Index dropped 17 percent this year through yesterday, compared with a 5 percent loss for the S&P 500 and a 14 percent decline for the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 11.6 times estimated earnings on average, compared with 12 times for the S&P 500 and 10 times for the Stoxx 600.
Companies in the MSCI Asia Pacific Index trade at about 1.3 times book value, compared with 2 times for the S&P 500 and 1.4 times for the Stoxx 600.
Japan’s Nikkei 225 Stock Average advanced 2 percent today as the nation’s markets resumed trading following a public holiday. Hong Kong’s Hang Seng Index jumped 2.4 percent, while Australia’s S&P/ASX 200 Index gained 0.6 percent and South Korea’s Kospi Index climbed 1.6 percent.
Futures on the Standard & Poor’s 500 Index slid 0.6 percent today, with declines deepening after European Central Bank president Jean-Claude Trichet said the region’s debt crisis has reached a “systemic dimension.”
In New York yesterday, the gauge rose 3.4 percent, its biggest rally since August, with all 10 industry groups advancing. The S&P 500 last week rebounded from the threshold of a bear market on optimism Europe will tame its debt crisis and after U.S. economic data improved.
China Banks Surge
The Stoxx Europe 600 Index completed its biggest four-day gain since 2008 yesterday.
Bank of China surged 7.7 percent to HK$2.65 in Hong Kong after Central Huijin began buying shares in the nation’s four biggest banks following a drop in valuations to below levels reached during the global financial crisis.
Agricultural Bank of China Ltd. (601288) jumped 13 percent to HK$2.99. Industrial and Commercial Bank of China Ltd. rose 6.7 percent to HK$4.31 and China Construction Bank Corp. (939) rallied 5.8 percent to HK$5.11.
Commodity producers rallied after copper futures for December delivery climbed 2.9 percent on the Comex in New York yesterday, while crude oil for November delivery gained 2.9 percent. The London Metal Exchange Index of prices for six industrial metals, including copper and aluminum, added 1.7 percent for its third straight daily increase. Crude and copper both declined today.
Mitsubishi Corp., Japan’s biggest commodities trader, gained 1.8 percent to 1,508 yen in Tokyo. Rio Tinto Group, the world’s second-largest mining company for sales, rose 0.9 percent to A$68. Korea Zinc Co., which producer zinc as well as gold and silver, surged 4.4 percent to 296,500 won in Seoul and Cnooc added 3.9 percent to HK$13.72 in Hong Kong.
“Commodity prices and stocks fell sharply over the last few months on worries Europe would blow up, causing a collapse in global growth,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “The pledges from Merkel and Sarkozy help provide confidence that this won’t happen.”
Sony jumped 5.7 percent to 1,496 yen in Tokyo. Daewoo Shipbuilding & Marine Engineering Co., a South Korean shipbuilder that gets 98 percent of its revenue overseas, advanced 2.9 percent to 24,750 won in Seoul.
Esprit Holdings Ltd. (330), a Hong Kong-listed global clothing retailer, advanced 12 percent to HK$11 after hedge fund Lone Pine Capital LLC increased its stake to become the company’s second-biggest shareholder.
To contact the reporter on this story: Shani Raja in Sydney at firstname.lastname@example.org
To contact the editor responsible for this story: Nick Gentle at email@example.com