Asia Stocks in Best Start on Record as China Signals Credit Ease

Asian stocks rose, spurring a record start to the year for the regional benchmark index, amid signs China will relax credit controls and after confidence among U.S. homebuilders beat estimates.

Toyota Motor Corp. (7203), the world’s biggest carmaker by market value, advanced 1.4 percent in Tokyo. Sumco Corp. (3436) led gains in semiconductor-related companies after ASML Holding NV, Europe’s largest maker of semiconductor equipment, forecast higher first- quarter orders. Agile Property Holdings (3383) Ltd., a mainland developer, rose 3.1 percent in Hong Kong on speculation China may ease capital requirements for lenders.

The MSCI Asia Pacific Index (TPX) advanced 1 percent to 119.34 as of 7:04 p.m. in Tokyo, headed for the highest close since Nov. 9. The measure has advanced 4.8 percent this year, the best start to any year since 1988, according to data compiled by Bloomberg. Today’s gain also came after the International Monetary Fund said it plans to expand its lending resources to counter Europe’s debt crisis

“The market is continuing its recovery amid some positive economic readings, and there are hopes that the Chinese government may take more measures,” said Chu Moon Sung, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees $28 billion. “Some investors who had taken a defensive and conservative stance appear to be slowly letting their guards down.”

Japan’s Nikkei 225 Stock Average rose 1 percent and South Korea’s Kospi Index gained 1.2 percent. Australia’s S&P/ASX 200 fell 0.1 percent, reversing earlier gains after a report showed the nation’s employers unexpectedly cut workers in December. Hong Kong’s Hang Seng Index rose 1.3 percent.

U.S. Data, IMF

Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. The index advanced 1.1 percent in New York yesterday as a report showed confidence among U.S. homebuilders rose in January to the highest level since 2007. The IMF is proposing to raise its lending capacity by as much as $500 billion to safeguard the global economy.

Equities also gained as a finance ministry official told reporters that Greece’s government could forge an agreement with private creditors by the end of this week after talks resumed in Athens yesterday.

Exporters advanced. Toyota, which gets 28 percent of its sales in North America, added 1.4 percent to 2,621 yen in Tokyo. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, rose 1.7 percent to 1,326 yen.

James Hardie Industries SE (JHX), an Australian building- materials supplier that gets almost 70 percent of sales from the U.S., increased 2.5 percent to A$7.45. Samsung Electronics Co. (005930), South Korea’s biggest exporter of consumer electronics, gained 4.1 percent to 1.072 million won.

Chipmakers Rise

The MSCI Asia Pacific Index (TPX) gained 3.8 percent this year through yesterday, compared with a 4 percent increase by the S&P 500 Index and a 3.7 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.4 times estimated earnings on average, compared with 12.5 times for the S&P 500 and 10.2 times for the Stoxx 600.

Semiconductor-related firms climbed after ASML Chief Executive Officer Eric Meurice said yesterday that the company expects a “healthy start” to the year with first-quarter orders forecast to rise. The Philadelphia Semiconductor Index, which tracks the performance of 30 industry stocks, rose 5 percent yesterday.

Sumco, a maker of silicon wafers for semiconductors, rose 9.4 percent to 607 yen, the second-biggest winner on the Asia- Pacific index. Tokyo Electron Ltd. (8035), a manufacturer of chipmaking gear, gained 3 percent to 4,355 yen. Elpida Memory Inc. (6665), a Japanese maker of semiconductors, rose 5.3 percent to 341 yen.

China’s Policy

China’s banking regulator is considering a plan to relax capital requirements for lenders after the world’s second- largest economy expanded at the slowest pace in 10 quarters, four people with knowledge of the matter said. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 1 percent.

“There’s still a lot of news we’ve got to overcome, in particular out of China,” said Belinda Allen, a senior investment analyst at Colonial First State Global Asset Management in Sydney, which oversees about $145 billion. “We still need to see signs of any policy easing coming out of China, and I think that would lead to a more upbeat outlook.”

Agile Property gained 3.1 percent to HK$8.79 in Hong Kong. China Overseas Land & Investment Ltd. (688) rose 2.8 percent to HK$14.84. Hitachi Construction Machinery Co (6305), a Japanese machinery maker that generates 26 percent of its revenue in China, advanced 2.8 percent 1,459 yen.

Lynas Corp., an Australian rare-earths developer, rose 8.5 percent to A$1.15 after Malaysia’s Trade and Industry Minister Mustapa Mohamed said his cabinet will soon decide on granting the company a license to refine rare earths in the country.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net

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