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Asian Stocks Rise After China Inflation, Production Data

Asian stocks rose, with the regional benchmark index extending a three-month high, as slowing gains in China’s inflation, industrial production and car sales boosted bets policy makers will add stimulus to support growth in the region’s biggest economy.

China Minsheng Banking Corp., the nation’s first non-state lender, rose 1.9 percent. Rio Tinto (RIO) Group climbed 3.6 percent in Sydney after earnings beat estimates and the mining company said a plan to sell diamond assets is “well advanced.” Oki Electric Industry Co. (6703), the best-performing stock in the Nikkei 225 Stock Average this year through yesterday, plunged 34 percent as the ATM maker was put on watch for possible delisting after a unit overstated accounts.

The MSCI Asia Pacific Index (MXAP) gained 0.8 percent to 121.07 as of 7:48 p.m. in Tokyo, with more than three stocks rising for each that slid on the measure. Shares added 2.6 percent in the previous three trading sessions.

“Money that was flowing out of risk assets because of Europe’s debt crisis is gradually coming back to places where there’s policy optimism,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo, which oversees the equivalent of $190 billion.

The Asia-Pacific gauge retreated 6.9 percent from a Feb. 29 high through yesterday as Europe’s deepening debt crisis and slower growth in the U.S. and China damped the outlook for global demand. Materials and energy stocks have led declines among the index’s 10 industry groups in the period.

BOJ Decision

The Nikkei 225 rose 1.1 percent today even after Japan’s machinery orders rebounded less than forecast and the Bank of Japan refrained from adding stimulus. South Korea’s Kospi Index (KOSPI) advanced 2 percent after the nation left its key interest rate unchanged.

Australia’s S&P/ASX 200 Index (AS51) fell 0.1 percent, dropping for the first time in four days. The nation’s employers added 14,000 jobs last month, more than the 10,000 median estimate by economists.

Hong Kong’s Hang Seng Index rose 1 percent. The Shanghai Composite Index climbed 0.6 percent after a raft of data signaling slower economic growth in the mainland, boosting prospects for further easing.

Mainland inflation cooled for a fourth month. Consumer prices rose 1.8 percent in July from a year earlier, down from 2.2 percent in June, the National Bureau of Statistics said today. China’s producer-price index fell 2.9 percent.

Slowing Growth

Industrial production in the world’s second-largest economy grew 9.2 percent in July from a year earlier, missing the median analyst estimate of 9.7 percent. Other data today showed retail sales grew at the slowest pace since 2007, while mainland passenger-vehicle sales trailed analysts’ estimates for the first time in five months.

“Momentum is slowing,” said Tim Leung, a portfolio manager who helps oversee about $1.5 billion at IG Investment Ltd. in Hong Kong. “The market is expecting some type of policy support from the Chinese government to accelerate the economy.”

China Minsheng Banking rose 1.9 percent to HK$7.38. Bank of Communications Co., the mainland’s fifth-largest lender, advanced 1.5 percent to HK$5.33.

Poly (Hong Kong) Investments Ltd., which develops, invests and manages properties in China, jumped 9.8 percent to HK$4.39 as developers rose in Hong Kong after Poly Real Estate Group Co. said July contracted sales jumped.

Rio Tinto gained 3.6 percent to A$56.86 in Sydney. The company reported first half profit of $5.9 billion, beating the $5.04 billion average of 11 analyst estimates compiled by Bloomberg.

Oki Dives

Among stocks that fell, Oki Electric tumbled 34 percent to 81 yen in Tokyo, its biggest drop in at least 37 years. The company said it will miss a financial reporting deadline after it found improper accounting at a Madrid-based unit that may trim earnings by about 8 billion yen ($102 million).

Nikon Corp. (7731), a Japanese maker of cameras and chipmaking equipment, sank 8.1 percent to 2,086 yen after cutting its annual profit forecast, citing the outlook for weakening global economic growth and a stronger yen.

Futures on the Standard & Poor’s 500 Index slid 0.1 percent today. The gauge added 0.1 percent yesterday after falling as much as 0.4 percent following comments by Federal Reserve Bank of Dallas President Richard Fisher signaling opposition to more stimulus. Adequate measures are already in place and global central banks may not have the capacity to undertake add stimulus, he said.

Asia’s benchmark index traded at 12.3 times estimated earnings yesterday, compared with 13.6 for the S&P 500 Index and 11.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

To contact the reporters 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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