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Asian Stocks Advance on Optimism Region Weathering Europe Crisis

Asian stocks (MXAPJ) rose, with a regional gauge heading for a three-week high, as manufacturing growth from Australia, China and India added to optimism the region’s economies will withstand Europe’s sovereign-debt crisis.

BHP Billiton Ltd. (BHP), which gets about 28 percent of sales from China, gained 1.1 percent in Sydney. Industrial & Commercial Bank of China (601398) Ltd., the world’s No. 1 lender by market value, advanced 3 percent as trading in Hong Kong resumed. Li & Fung Ltd. (494), a supplier of toys and clothes to retailers including Wal-Mart Stores Inc., climbed 6 percent on speculation consumer spending in the U.S. will increase after payrolls climbed for a second month.

“Positive economic data provide a catalyst for a small new-year rally,” said Pauline Dan, who oversees $480 million as chief investment officer at Samsung Asset Management in Hong Kong. “We’ll probably see more headwinds from Europe.”

The MSCI Asia Pacific Excluding Japan Index (MXAPJ) gained 2 percent to 400.33 as of 6:59 p.m. in Hong Kong, poised for its highest close since Dec. 8. Almost seven stocks rose for each that fell in the gauge. The measure posted its first annual decline in three years in 2011 as China took steps to cool its property market and Europe struggled to resolve its debt crisis.

Australia’s S&P/ASX 200 Index (AS51) rose 1.1 percent, while Hong Kong’s Hang Seng Index advanced 2.4 percent. India’s Sensitive Index gained 2.7 percent.

Singapore’s Straits Times Index added 1.6 percent even as the city-state’s economy shrank for the second time in three quarters. Markets in China, Japan, Thailand and New Zealand were closed for a holiday.

Inter-Korean Relations

South Korea’s Kospi Index climbed 2.7 percent after President Lee Myung Bak said a new era in inter-Korean relations is possible if the North is sincere about shedding its nuclear program. Kim Jung Un was appointed as head of the North Korean army following the Dec. 17 death of his father Kim Jong Il.

Chinese lenders and commodity suppliers advanced as manufacturing in India and China improved in December, while Australian output expanded for the first time in six months, separate surveys showed. Data due out today may show production in American factories climbed to a six-month high in December, according to economists surveyed by Bloomberg News.

BHP increased 1.1 percent to A$34.80 in Sydney. Jiangxi Copper Co., the country’s largest producer of the metal, gained 3.2 percent to HK$17.32. ICBC climbed 3 percent to HK$4.75 in Hong Kong. China Construction Bank Corp. (939), the nation’s second- biggest lender, rose 1.9 percent to HK$5.52.

U.S. Hiring

The Standard & Poor’s 500 Index slipped 0.4 percent on Dec. 30 as concern over Europe’s debt crisis overshadowed optimism that the U.S. economy will expand in 2012. Hiring probably accelerated in December for a second month, a sign an improving U.S. labor market will bolster consumer spending in early 2012, economists said before a report on Jan. 6.

Exporters to the U.S. rallied. Li & Fung jumped 6 percent to HK$15.24 in Hong Kong. Samsung Electronics Co., the world’s second-largest maker of mobile phones by sales, increased 2.3 percent to 1.105 million won in Seoul. Billabong International Ltd. (BBG), an Australian surfwear maker that gets about half of sales from the Americas, rose 1.7 percent to A$1.80.

Energy producers posted the biggest advance among the 10 industry groups in the MSCI Asia Pacific Excluding Japan Index after crude oil futures increased and 21st Century Business Herald reported on Jan. 1 that China may allow its oil refiners to set oil prices.

SK Innovation Co., a South Korean energy producer, jumped 6.4 percent to 149,500 won. Cnooc Ltd. (883), China’s biggest offshore oil producer, increased 4.1 percent to HK$14.14 in Hong Kong. China Petroleum & Chemical Corp. (600028), the nation’s biggest refiner by sales, climbed 5.5 percent to HK$8.62.

PetroChina Co. (857), Asia’s largest company by market value, gained 4.5 percent to HK$10.10, set for the highest close since Dec. 1.

Consumer Spending

Chinese appliance retailers and manufacturers rallied after China National Radio reported that the government may introduce incentives to boost consumer spending. The policy may be announced as early as next week, the report cited Shen Danyang, a spokesman for the Commerce Ministry, as saying.

Gome Electrical Appliances Holdings Ltd. (493), China’s second- biggest electronics retailer, surged 8.9 percent to HK$1.96, the biggest advance on the MSCI Asia Pacific excluding Japan Index. Haier Electronics Group Co., a home appliance appliance maker, climbed 6.5 percent to HK$7.40. Skyworth Digital Holdings Ltd. (751), a manufacturer of televisions, advanced 7 percent to HK$2.91.

The MSCI Asia Pacific Index (MXAP), which includes Japan, lost about $1.5 trillion in 2011 amid concern Europe’s debt crisis will drag the global economy into recession. Stocks on Asia’s benchmark index were valued at 12.6 times estimated earnings on average, compared with 12.7 times for Standard & Poor’s 500 Index (SPX) and 9.9 times for the Stoxx Europe 600 Index.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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