Asian Stocks Post Biggest Weekly Gain in a Month on U.S.

Asian stocks advanced, with the regional benchmark index posting its biggest weekly gain in a month, after reports on U.S. retail sales, housing starts and manufacturing beat estimates and China’s economy showed signs of stabilization.

Li & Fung Ltd. (494), a supplier of toys and clothes to retailers including Wal-Mart Stores Inc., climbed 8.5 percent in Hong Kong. Industrial & Commercial Bank of China Ltd., the world’s biggest lender by market value, rose 2.8 percent as China’s retail sales and exports accelerated in September. Softbank Corp. jumped 7.3 percent in Tokyo after Japan’s third-largest mobile-phone company agreed to buy 70 percent of Sprint Nextel Corp. for $20.1 billion.

The MSCI Asia Pacific Index (MXAP) advanced 2.3 percent to 123.55 this week, the most since the period ended Sept. 14. Through yesterday The gauge had climbed 13 percent from this year’s low on June 4, as stimulus measures in Europe, the U.S., Japan and China boosted market sentiment amid a global economic slowdown and Europe’s debt crisis.

“We see good signs of stabilization and we can probably say the U.S. economy is not going backwards,” said Tim Leung, a portfolio manager who helps manage about $1.5 billion at IG Investment Ltd. in Hong Kong. “The market is enjoying a moment of relatively less hostile news from Europe.”

Weaker Yen

Japan’s Nikkei 225 Stock Average (NKY) rallied 5.5 percent this week, the biggest weekly advance since December, as yen weakened against the U.S. dollar, which could help boost earnings of Japanese exporters.

South Korea’s Kospi Index added 0.6 percent. Australia’s S&P/ASX 200 Index climbed 1.9 percent. Hong Kong’s Hang Seng Index increased 2 percent, while China’s Shanghai Composite Index rose 1.1 percent.

The Asian benchmark traded at 13.1 times estimated earnings on average, compared with 13.7 for the Standard & Poor’s 500 Index and 12.2 for the Stoxx Europe 600 Index.

Exporters advanced as reports showed industrial production and retail sales gained more than expected in the U.S. last month, adding to signs of a recovery of the world’s biggest economy is taking hold.

‘Reasonable Rebound’

“It does feel like there’s some momentum there in the economy,” said Matt Riordan, a portfolio manager who helps manage about $6.5 billion in Sydney at Paradice Investment Management Pty. “We’ve got a reasonable rebound. But the problem is whether we will start seeing a recovery, particularly out of China.”

Li & Fung, which counts the U.S. as its largest market, climbed 8.5 percent to HK$12.96 in Hong Kong. James Hardie Industries SE (JHX), a building materials supplier that gets about 67 percent of sales from the U.S., rose 5.5 percent to A$9.40 in Sydney. Toyota Motor Corp., the world’s biggest carmaker by market value, increased 7 percent to 3,140 yen in Tokyo.

China’s economic growth has started to stabilize, Premier Wen Jiabao said in remarks published on Oct. 17 by the official Xinhua News agency. The government is confident of achieving annual targets and the economy will continue to show “positive changes,” Wen said, according to Xinhua. The country’s gross domestic product growth slowed to 7.4 percent in the third quarter, while exports, retail sales and industrial production started to show signs of pickup.

Chinese lenders and developers advanced. ICBC, the nation’s biggest bank, gained 2.8 percent to HK$5.10 in Hong Kong. Agricultural Bank of China Ltd rose 2.2 percent to HK$3.29. China Overseas Land & Investment Ltd. (688), the nation’s biggest real estate company traded in Hong Kong, climbed 4.6 percent to HK$20.25.

Spanish Rating

Companies that do business in Europe advanced after Moody’s Investor Service retained Spain’s investment-grade credit rating, saying the European Central Bank’s willingness to buy the nation’s debt reduced the risk of losing market access. Spain avoided joining euro-region peers Cyprus, Portugal, Ireland and Greece in falling below investment grade.

HSBC Holdings Plc, Europe’s biggest lender by market value, rose 3.2 percent to HK$76.55 in Hong Kong. Hutchison Whampoa Ltd., the owner of retail chains, utilities and ports that counts Europe as its largest market, added 1.5 percent to HK$76.40. Canon Inc. (7751), the world’s top camera maker that gets about 31 percent of sales from Europe, jumped 7.8 percent to 2,649 yen in Tokyo.

“Spain got its rating maintained, damping risk on yield gains for now,” said Takeru Ogihara, chief strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s third-largest lender by market value. “That will buy time for officials to tackle the situation.”

Woodside, Softbank

Woodside Petroleum Ltd., Australia’s second-biggest oil producer, advanced 5.2 percent to A$35.98 in Sydney after boosting its output forecast.

Softbank Corp. jumped 7.3 percent to 2,569 yen in Tokyo after agreeing to acquire 70 percent of Sprint Nextel Corp. for $20.1 billion to expand into the U.S. mobile-phone market.

NEC Corp. surged 9.6 percent to 137 yen in Tokyo after Japan’s biggest maker of telecommunications equipment raised its estimate for first-half operating profit to 47 times the previous forecast.

Among stocks that fell, Ten Network Holdings Ltd., the Australian broadcaster run by Lachlan Murdoch, plunged 24 percent to 28 Australian cents, the lowest level on record. The company posted its first full-year loss in three years and Champ Private Equity said it’s ending plans to buy Ten Network’s Eye Corp. billboard unit.

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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