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Asian Stocks Advance as China Insurers, Lenders Increase

President Barack Obama
President Barack Obama. Photographer: Andrew Harrer/Bloomberg

Asian stocks rose, with the regional benchmark index headed for its highest close in seven months, as Chinese banks and insurers surged after a rule limiting insurers’ investments in commercial lenders was eliminated and the country’s new leaders pledged to promote “urbanization.”

Industrial & Commercial Bank of China Ltd., the world’s biggest lender, gained 2.5 percent in Hong Kong. Ping An Insurance (Group) Co. jumped 4.9 percent as HSBC Holdings Plc agreed to sell its stake in China’s second-largest insurer for $9.4 billion. Fast Retailing Co. gained 3 percent in Tokyo after Asia’s No. 1 apparel seller reported higher domestic sales at its Uniqlo chain.

The MSCI Asia Pacific Index added 0.4 percent to 125.33 as of 8:21 p.m. in Tokyo, erasing losses of as much as 0.3 percent and heading for its highest close since April 30. About two shares rose for each that fell on the gauge. The measure advanced last month amid signs China’s economic slowdown may be ending and optimism U.S. lawmakers will agree on a budget deal to avert the so-called fiscal cliff.

“There’s a lot of talk about potential policy support for China’s economy,” said Tim Leung, a fund manager who helps oversee about $1.5 billion at IG Investment Ltd. “While urbanization is not new, people will probably be focusing on that trend. There’s a lot of positive benefit from urbanization, like infrastructure spending.”

Japan’s Nikkei 225 Stock Average gained 0.4 percent, reversing losses of as much as 0.6 percent. South Korea’s Kospi Index rose and Taiwan’s Taiex Index both advanced 0.6 percent. Hong Kong’s Hang Seng Index rose 2.2 percent.

Accommodative Policies

China’s Shanghai Composite Index climbed 2.9 percent, the biggest advance since Sept. 7. The government will keep macroeconomic policies stable, making adjustments as needed to deal with difficulties, the Communist Party’s Politburo said in its first assessment of the economy under new leader Xi Jinping.

China will expand domestic demand and actively promote urbanization, the official Xinhua News Agency said yesterday. Separately, China National Radio reported yesterday China will focus on simplifying taxes on property transactions.

“The tone of ‘policy continuity and stability’ implies both monetary and fiscal policies are likely to stay accommodative to help China strengthen domestic demand and tackle external challenges,” HSBC economists Hongbin Qu and Junwei Sun said in a note today. “In addition, fiscal and urbanization reforms are set to be stepped up.”

Chinese lenders and developers advanced. ICBC, as China’s biggest bank is also known, climbed 2.5 percent to HK$5.30. China Construction Bank Corp. rose 3.4 percent to HK$6.07. China Resources Land Ltd., a state-owned developer, jumped 2.5 percent to HK$20.70.

Insurers Rally

Evergrande Real Estate Group Ltd. surged 8.8 percent to HK$4.09 after the Chinese homebuilder reported November home sales of 11.8 billion yuan ($1.9 billion), compared with 1.2 billion yuan a year earlier. Total sales this year have reached 84.6 billion yuan, exceeding the full-year target of 80 billion yuan, it said.

Ping An gained 4.9 percent to HK$60.50, its biggest advance since March 8. HSBC, Europe’s biggest bank by market value, is selling its 15.6 percent stake in the insurer at HK$59 a share to Thailand’s Charoen Pokphand Group Co., it said in an e-mailed statement today. HSBC climbed 1.3 percent.

Other insurers rose as the China Insurance Regulatory Commission scrapped a regulation on insurance companies’ investment limits in commercial banks. China Life Insurance Co., the country’s biggest insurer, advanced 4.2 percent to HK$23.45. New China Life Insurance Co. jumped 8.3 percent to HK$26.05.

Australian GDP

Australia’s S&P/ASX 200 Index added 0.4 percent even as the nation’s economic growth slowed. Gross domestic product rose 0.5 percent in the third quarter compared to the previous three months, when it expanded 0.6 percent, a Bureau of Statistics report released in Sydney today showed. The result compared with the median of 25 estimates in a Bloomberg News survey for a 0.6 percent gain.

Futures on the Standard & Poor’s 500 Index increased 0.3 percent today. The S&P 500 lost 0.2 percent yesterday as President Barack Obama held his ground on raising tax rates for the highest-income Americans. A Republican counteroffer on resolving the so-called fiscal cliff doesn’t go far enough and won’t raise the revenue needed to shrink the deficit by $4 trillion over the next decade, Obama said.

“We have the potential of getting a deal done,” Obama said at the White House yesterday on Bloomberg TV in his first interview since winning re-election. “We’re going to have to see the rates on the top 2 percent go up, and we’re not going to be able to get a deal without it,” he said.

Fiscal Cliff

A budget compromise would help avert the fiscal cliff, which could result in more than $600 billion in tax increases and spending cuts taking effect next month.

“Investors should still be concerned about the U.S. fiscal cliff as Republicans and Democrats have found it very hard to agree,” said Angus Gluskie, managing director at Sydney-based White Funds Management, which oversees more than $350 million.

The MSCI Asia Pacific Index advanced 14 percent through yesterday from this year’s low on June 4 as central banks added stimulus to spur economic growth. The gauge climbed every day except one during the past 10 sessions. The benchmark index traded at 14.1 times estimated earnings, compared with 13.5 times for the S&P 500 Index and 12.5 times for the Stoxx Europe 600.

Samsung, Sharp

Fast Retailing gained 3 percent to 19,250 yen in Tokyo. Same-store sales at the company’s Uniqlo outlets in Japan increased 13.7 percent last month from a year earlier as cold weather drove demand, the company said in a statement yesterday.

Samsung Electronics Co. rose 1.8 percent to 1.455 million won in Seoul after promoting Lee Jae Yong to vice chairman, putting him a step closer to succeeding his father as leader of the world’s biggest maker of televisions and mobile phones.

Sharp Corp., Japan’s largest liquid-crystal-display maker, increased 4 percent to 181 yen after saying it plans to raise as much as 9.9 billion yen ($121 million) selling shares to Qualcomm Inc.

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