Asian Stocks Advance After Senate Passes U.S. Budget Bill

Asian stocks rose, heading for their highest close since August 2011, as the U.S. House of Representatives passed legislation averting some of $600 billion in automatic tax increases and spending cuts.

Australian gold producer Newcrest Mining Ltd. (NCM) added 3.6 percent as the precious metal climbed. BHP Billiton Ltd., the world’s biggest mining company, advanced 2 percent in Sydney, leading gains among raw-material producers, after China’s manufacturing expanded for a third month. Techtronic Industries Co. (669), a maker of power tools that counts North America as its biggest market, gained 3.3 percent in Hong Kong as the Hang Seng Index capped its best opening session of the year since 2009.

The MSCI Asia Pacific Excluding Japan Index (MXAPJ) rose 2.1 percent to 476.23 as of 5:20 p.m. in Hong Kong. A close at this level would be the highest in 17 months. More than five shares increased for each that fell. Markets in Japan and mainland China are closed today and tomorrow for public holidays.

“Short term, the market sentiment will remain quite positive because the investors believe the fiscal cliff can be avoided,” said Ben Kwong, chief operating officer at brokerage KGI Asia Ltd. in Hong Kong. “The China PMI of course is another stimulus for the market.”

The broader benchmark MSCI Asia Pacific Index (MXAP), which includes Japan, surged 14 percent last year as central banks from the U.S., Europe, Japan and China took action to spur economic growth. The gauge traded at 15 times average estimated earnings, compared with 13.8 for the Standard & Poor’s 500 Index and 12.7 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

U.S. Agreement

Trading volume on Australia’s S&P/ASX 200 Index was 34 percent below its 30-day average for the time of day, according to data compiled by Bloomberg. The measure rose 1.2 percent.

South Korea’s Kospi index climbed 1.7 percent with volume 6.8 percent below the 30-day average.

Hong Kong’s Hang Seng Index advanced 2.9 percent, closing above 23,000 (HSI) for the first time since June 2011, while a gauge of Chinese companies listed in the city added 4 percent. It was the Hang Seng Index’s best opening day of a year since Jan. 2, 2009, when it surged 4.6 percent.

Singapore’s Straits Times Index (FSSTI) increased 1.1 percent after the city state’s economy grew at a faster than estimated pace. Taiwan’s Taiex Index gained 1 percent.

The 257-167 bipartisan vote breaks a yearlong impasse over how to head off $600 billion in tax increases and spending cuts set to begin taking effect today. The Senate passed the bill early yesterday morning, 89-8, and it goes to President Barack Obama for his signature.

Exporters advanced. Techtronic Industries gained 3.3 percent to HK$14.84. Li & Fung Ltd., an apparel maker that gets 60 percent of revenue in the U.S., advanced 6.3 percent to HK$14.54. James Hardie Industries Plc (JHX), which sells home siding in the U.S., increased 1.1 percent to A$9.22. The company jumped 34 percent last year.

Gold Rises

The HSI Volatility Index (VHSI) that measure the 30 calendar-day expected volatility of the Hang Seng Index lost 10 percent to 16, indicating traders expect a swing of about 4.6 percent in the next month.

Gold producers climbed as the price of the precious metal rose 1 percent to $1,681.32 per ounce. Newcrest gained 3.6 percent to A$22.98 and Alacer Gold Corp. rose 5.5 percent to A$5 in Sydney. Zijin Mining Group Co., China’s largest producer of the metal, added 2.6 percent to HK$3.13 in Hong Kong.

Raw-material producers rose, posting the largest gains among 10 industry groups on the Asian equity index, after Chinese manufacturing data added to evidence that the recovery in the world’s second-biggest economy will extend into the new year. BHP Billiton climbed 2 percent to A$37.84 and Rio Tinto Group gained 2.4 percent to A$67.62 in Sydney.

The Purchasing Managers’ Index was 50.6 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing. A reading above 50 indicates expansion. The result follows a private PMI from HSBC Holdings Plc and Markit Economics that on Dec. 31 also showed expansion.

Insurers and banks in Hong Kong advanced after the People’s Bank of China Governor Zhou Xiaochuan said the nation will maintain “prudent” monetary policy and deepen financial reforms in 2013 and the China Securities Regulatory Commission said it plans to allow asset management units and securities brokers to set up mutual funds.

China Life Insurance Co. (2628), the world’s largest insurer by market value, added 6.7 percent to HK$27. Ping An Insurance (Group) Co. added 5.2 percent to HK$68.25. Industrial & Commercial Bank of China Ltd., the nation’s largest lender, rose 3.6 percent to HK$5.70.

To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net; Eleni Himaras in Hong Kong at ehimaras@bloomberg.net

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

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