Most Asian Stocks Advance on Higher Oil, Materials Prices

Asian stocks rose, with the regional benchmark index climbing from its lowest level in more than two months, as materials producers and traders increased on higher commodity prices and Citigroup Inc. recommended buying global industrial shares.

BHP Billiton Ltd. (BHP), the world’s biggest mining company, added 0.9 percent in Sydney as copper and oil prices climbed. Fanuc Corp., a maker of production automation systems, advanced 2.7 percent after Citigroup maintained a buy rating on the Japanese company. Australian banks increased after the country’s payrolls rose almost seven times as much as economists estimated.

The MSCI Asia Pacific Index rose 0.6 percent to 123.81 as of 4:26 p.m. in Tokyo after falling as much as 0.2 percent. Almost two stocks rose for each that fell on the gauge, which slid 3.4 percent in the six trading days through yesterday, its longest such streak since August. With the exception of benchmark indexes in Seoul and Karachi, every major gauge in the region advanced today.

“Today we will see a little bit of rebound after five or so days of negative market activity, but there are significant headwinds on the horizon,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “It’s still very much the time to be cautious. Spain and Italy continue to be problems in Europe, and we’ve got an imminent North Korean rocket launch, which over the next few days people will be watching with interest.”

The Asia-Pacific gauge fell 4.6 percent through yesterday from a peak for the year on Feb. 29 as China announced a lower target for economic growth and U.S. Federal Reserve officials warned against overconfidence in the recovery.

North Korea Rocket

The measure, which includes some companies from emerging markets, trades at 12.6 times estimated earnings compared with 13.1 times for the Standard & Poor’s 500 Index and 10.6 times for the Stoxx Europe 600 Index.

South Korean shares dropped as North Korea prepared to test a long-range rocket. Samsung Electronics Co. (005930), which supplies touch screens to Nokia Oyj, fell 2.9 percent after the Finnish company reported a software fault with its latest U.S. model. The Kospi index fell 0.4 percent, paring losses of as much as 1.3 percent.

Japan’s Nikkei 225 Stock Average climbed 0.7 percent after falling as much as 0.1 percent. Volume on the gauge was about 12 percent below the 30-day average for the time of day.

Australia’s S&P/ASX 200 Index advanced 0.8 percent in Sydney as BHP Billiton and Rio Tinto Group climbed amid higher metal and oil prices and unemployment remained at 5.2 percent, lower than the 5.3 percent median estimate of 24 economists in a Bloomberg survey.

China Interest Rates

The Hang Seng Index rose 1 percent as Chinese banks advanced after Nomura Holdings Inc.’s chief Asian equity strategist Michael Kurtz wrote in a report dated yesterday that the country may cut interest rates in the “immediate future.”

Industrial & Commercial Bank of China Ltd., the world’s No. 1 lender by market value, increased 1.4 percent to HK$5.03. China Construction Bank Corp., the second-largest, advanced 1.7 percent to HK$6.03. China Securities Journal said the two biggest lenders and Bank of China Ltd., which rose 1.9 percent in Hong Kong, have accelerated the pace of home-loan approvals.

Oil rose for a second day in New York after a bigger-than- expected decline in fuel stockpiles in the U.S., the world’s biggest crude consumer. Crude for May delivery yesterday climbed 1.7 percent to $102.70 a barrel, the highest close since April 5.

BHP, Rio Rise

BHP, Australia’s biggest oil producer and the world’s largest mining company, added 0.9 percent to A$33.90 and Rio Tinto advanced 1.5 percent to A$64.46. Jiangxi Copper Co., China’s biggest producer of the metal, climbed 1.7 percent to HK$18.28 in Hong Kong, while Mitsui & Co. Ltd. (8031), Japan’s No. 2 commodity trading company by market value, increased 3.2 percent to 1,301 yen in Tokyo.

Copper gained for a second day as better-than-expected car sales in China and expectations of monetary easing by the largest user boosted the demand outlook. The metal for delivery in three months advanced as much as 0.7 percent to $8,095 a metric ton on the London Metal Exchange, and traded at $8,076 by 9:57 a.m. Shanghai time.

Fanuc rose 2.7 percent to 14,600 yen. Komatsu Ltd., a maker of excavators, climbed 2.3 percent to 2,346 yen. THK Co. (6481), which makes linear motion systems for use in robots and machine tools, added 1.8 percent to 1,603 yen after Citigroup reiterated a buy recommendation on the stock.

Capital goods led outperformance in the first quarter, while commercials and transportation stocks underperformed, Citigroup wrote in a note to clients dated yesterday as it upgraded global industrial companies to overweight. Balance sheets remain strong, companies are holding record amounts of cash and merger activity remains a possible catalyst for the sector, the note said.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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