Asian stocks rose for the first time in three days as Italian Prime Minister Silvio Berlusconi’s offer to resign bolstered optimism Europe may find a way to contain its debt crisis, and China’s inflation rate eased.
Industrial & Commercial Bank of China (1398) Ltd. led a rally among Chinese lenders in Hong Kong as the nation’s inflation rate moderated to 5.5 percent last month. Westpac Banking Corp. (WBC), Australia’s second-largest lender by market value, gained 1.3 percent in Sydney as Australian home-loan approvals rose more than estimated in September. BHP Billiton Ltd. (BHP), the world’s biggest mining company, rose 1.5 percent as copper futures advanced.
“The markets will take the near-term resolution of political uncertainties in Europe positively,” said John Woods, Hong Kong-based chief Asian strategist at Citigroup Inc.’s private bank. “Now that we see inflation easing, it suggests that Asian central banks can switch to a more pro-growth strategy.”
The MSCI Asia Pacific Index increased 1.1 percent to 120.47 as of 5:38 p.m. in Tokyo, with two stocks rising for each that fell on the gauge. The measure sank 3.6 percent last week after Greece announced plans to hold a referendum on Europe’s rescue package. The sovereign-debt crisis has stirred political dramas across the region, with Berlusconi offering to resign just days after Greek Prime Minister George Papandreou agreed to step aside.
Japan’s Nikkei 225 (NKY) Stock Average rose 1.2 percent. South Korea’s Kospi Index added 0.2 percent. Australia’s S&P/ASX 200 advanced 1.2 percent. Hong Kong’s Hang Seng Index climbed 1.7 percent, while China’s Shanghai Composite Index gained 0.8 percent.
‘Taming Political Risks’
Futures on the Standard & Poor’s 500 Index lost 0.8 percent today. In New York, the index advanced 1.2 percent yesterday as Berlusconi agreed to quit after the Italian parliament next week approves austerity plans promised to European partners. The announcement came after the premier yesterday failed to muster an absolute majority on a routine parliamentary ballot.
“A change in premiership is going to tame political risks somewhat because criticism against Berlusconi was strong,” said Ayako Sera, a market strategist at Sumitomo Trust & Banking Co. in Tokyo, which manages the equivalent of $322 billion. “Berlusconi’s resignation gives a short-term positive for the market, while the focus switches to austerity measures.”
Financial stocks were the biggest contributors to the MSCI Asia Pacific Index’s advance today as Chinese lenders in Hong Kong rallied after China reported inflation at the slowest pace in five months.
ICBC, as China’s biggest lender is known, climbed 3.6 percent to HK$5.19. China Construction Bank Corp. (939), the second- largest, advanced 1.6 percent to HK$5.71. Agricultural Bank of China Ltd. (601288) rose 1.9 percent to HK$3.67.
China’s inflation data should be “quite positive to market sentiments,” economists at Bank of America Corp.’s Merrill Lynch unit including Ting Lu wrote in a note. “As inflation worries ease, the room for fine-tuning monetary tightening is getting bigger.”
Australian banks advanced after the nation’s home-loan approvals rose more than economists forecast in September, the sixth straight monthly gain, as more first-time buyers entered the market.
Westpac gained 1.3 percent to A$21.56. Australia and New Zealand Banking Group Ltd., the nation’s third-biggest lender, increased 0.8 percent to A$21.76. National Australia Bank Ltd. (NAB) added 1.3 percent to A$25.76.
A gauge of energy companies led the advance among the 10 industry groups in the regional benchmark index crude oil traded near a three-month high. Copper futures rose for the first time in four days in London.
BHP rose 1.5 percent to A$38.33 in Sydney. Cnooc Ltd. (883), China’s biggest offshore oil producer, jumped 4 percent to HK$15.66 in Hong Kong. Glencore International Plc, the world’s largest commodities trader, increased 3.1 percent to HK$55.75.
Hanjin Heavy Industries & Construction Co. surged 14 percent to 20,550 won in Seoul, the biggest advance on the regional benchmark index, after Yonhap News reported the shipbuilder reached a tentative agreement with its labor union to end 11 months of dispute.
Olympus Corp. (7733), which yesterday said it inflated adviser payments to hide losses with the help of three of its top executives, plunged 20 percent to 584 yen, the most on the Asian gauge. The Tokyo Prosecutor’s Office is investigating Olympus on suspicion the company broke securities laws, a senior official from the department said, speaking on condition he not be identified ahead of an official announcement.
The MSCI Asia Pacific Index declined 13 percent this year through yesterday, compared with a 1.5 percent gain by the S&P 500 and a 13 percent drop by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13 times estimated earnings on average, compared with 12.9 times for the S&P 500 and 10.4 times for the Stoxx 600.
Of the 482 stocks on the on the regional benchmark index that reported results since October 11, 224 missed analysts estimates, while 166 exceeded expectations, according to data compiled by Bloomberg.
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