Asian Stocks Advance as Stimulus Hopes Temper GDP Concern

Asian stocks rose for a third day amid optimism policy makers from China to the U.S. will do more to support the world’s largest economies amid a slowdown that prompted the International Monetary Fund to cut its forecast for global growth.

China Railway Group Ltd. (390) rose 5.9 percent in Hong Kong after the government said it will boost spending on rail lines. Fraser & Neave Ltd. climbed 2.5 percent in Singapore after Oversea-Chinese Banking Corp. and its insurance unit received an offer for their stake in the beverage maker. JX Holdings Inc. (5020) sank 7.8 percent in Tokyo after saying it will shut of one of its refineries after finding falsified safety reports.

The MSCI Asia Pacific Index (TPX) rose 0.4 percent to 116.18 as of 6:42 p.m. in Tokyo. More than five stocks rose for every four that fell. The gauge gained yesterday after Premier Wen Jiabao said China will increase measures to support growth in the world’s second-largest economy.

“Hopes of global monetary easing and stimulus measures are preventing investors from becoming too pessimistic,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo, which oversees about 15 trillion yen ($190 billion). “The global slowdown is causing investor concern about corporate earnings and equity markets.”

Annual Drop

The MSCI Asia Pacific Index (MXAP) fell 10 percent from this year’s high on Feb. 29 through yesterday as Europe’s debt crisis weighed on growth and corporate earnings. Stocks in the measure are valued at 11.8 times estimated earnings on average, compared with 13 for the Standard & Poor’s 500 Index (SPXL1) and 10.8 for the Stoxx Europe 600 Index.

Japan’s Nikkei 225 Stock Average rose 0.4 percent after reopening from a holiday yesterday. The broader Topix Index dropped 0.4 percent as the country’s atomic utilities plunged amid safety concerns and industry restructuring.

Australia’s S&P/ASX 200 Index (AS51) advanced 0.9 percent. Singapore’s Straits Times Index gained 0.5 percent after the island state’s export growth unexpectedly quickened in June. The gauge has risen 13 of the last 15 days.

Hong Kong’s Hang Seng Index jumped 1.8 percent, while China’s Shanghai Composite Index climbed 0.6 percent. South Korea’s Kospi Index advanced 0.2 percent.

China is boosting this year’s railway infrastructure investment plan by 9 percent to 448.3 billion yuan ($70.3 billion), according to a provincial office of the National Development and Reform Commission.

China Railway Group rose 5.9 percent to HK$3.40 in Hong Kong, while Chinese train maker CSR Corp. gained 2.4 percent to HK$5.58.

U.S. Futures

Futures on the Standard & Poor’s 500 Index rose 0.5 percent today. The index lost 0.2 percent in New York yesterday after U.S. retail sales unexpectedly dropped 0.5 percent in June amid weak job growth.

Federal Reserve Chairman Ben S. Bernanke is scheduled to deliver his semi-annual report to the Congress today and tomorrow amid speculation he will hint at further monetary policy easing. A report today may show the U.S. consumer-price index was little changed last month from May, according to the median forecast of 81 economists surveyed by Bloomberg News.

“There is market positioning for Bernanke to deliver something today,” said Joseph Capurso, a strategist in Sydney at Commonwealth Bank of Australia, the nation’s biggest lender.

The IMF cut its 2013 global economic growth forecast as Europe’s debt crisis prolongs Spain’s recession and slows expansion in emerging markets. Growth worldwide will be 3.9 percent next year, less than the 4.1 percent estimate in April, the IMF predicted in an update of its World Economic Outlook. Japan’s growth outlook for this year was raised to 2.4 percent from 2 percent.

Falsified Records

Fraser & Neave (FNN) advanced 2.5 percent to S$8.10 in Singapore. Oversea-Chinese Banking Corp., Singapore’s second-biggest bank and its insurance unit said they received an offer for their S$2.7 billion ($2.1 billion) stake in Fraser & Neave. OCBC climbed 0.8 percent to S$9.25.

JX Holdings slumped 7.8 percent to 356 yen. The company said it will shut all processing units at its Mizushima B refinery in western Japan after finding falsified safety reports over more than a decade.

Japanese utility shares had the second-biggest decline among the Topix’s 33 industries after a government advisory body on July 13 recommended breaking up power generators’ regional distribution monopolies. Tokyo Electric Power Co., the utility at the center of the Fukushima nuclear disaster, slumped 12 percent to a record-low 123 yen.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

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

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