Asian Stocks Set to Gain Most Since September on Fed Bets

Asian stocks rose, with the regional benchmark index on course for its biggest gain since September, as slower-than-estimated U.S. economic growth stoked speculation the Federal Reserve may hold back from reducing stimulus.

Samsung Electronics Co., the world’s largest maker of smartphones, climbed 6.2 percent in Seoul. China Gas Holdings Ltd. gained 4.8 percent in Hong Kong after the supplier of natural gas to 172 Chinese cities posted earnings that beat estimates. Newcrest Mining Ltd., Australia’s biggest gold producer, jumped 6.3 percent as the precious metal headed for its first advance in four days.

The MSCI Asia Pacific Index increased 1.8 percent to 128.52 as of 5:52 p.m. in Tokyo, with almost five shares rising for each that fell. The gauge is poised for its second monthly decline. The measure is headed for its biggest quarterly drop in a year, after China’s money-market rates surged to a record and Fed Chairman Ben S. Bernanke said policy makers may start dialing down stimulus.

“Central-bank statements have combined with some softish data to remind people that the U.S. recovery remains the weakest in history and that policy action is not imminent,” Matthew Sherwood, Sydney-based head of investment market research at Perpetual Ltd., which manages about $25 billion, said by e-mail. “The risk of tapering has not gone away.”

Japan’s Topix index gained 2.8 percent and the benchmark Nikkei 225 Stock Average increased 3 percent. South Korea’s Kospi index jumped 2.9 percent. Taiwan’s Taiex index advanced 1.3 percent. Australia’s S&P/ASX 200 Index added 1.7 percent New Zealand’s NZX 50 Index and Hong Kong’s Hang Seng Index both rose 0.5 percent.

Cash Crunch

China’s Shanghai Composite Index fell 0.1 percent, extending losses for a seventh day, amid ongoing concern a surge in funding costs this month will curb growth.

Fitch Ratings cut its 2013 growth forecast for China, saying a jump in interbank rates in June is likely to be a drag on the economy. The seven-day repurchase rate fell to 6.74 percent, compared with this year’s average of 3.85 percent, data compiled by Bloomberg showed.

“The cash crunch has eased a bit but its impact on the real economy has yet to be known,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “Investors are cautious at this stage.”

Shares on the MSCI Asia Pacific Index traded at 12.3 times estimated earnings as of yesterday, compared with 14.5 for the Standard & Poor’s 500 Index and 12.6 times for the Stoxx Europe 600 Index, the data showed.

U.S. Economy

Futures on the Standard & Poor’s 500 Index added 0.1 percent today. The S&P 500 increased 1 percent yesterday, rising for a second day.

Government data showed gross domestic product expanded at a revised 1.8 percent annualized rate from January through March, down from a prior estimate of 2.4 percent. Household purchases, which account for about 70 percent of the economy, were revised to a 2.6 percent advance compared with the 3.4 percent gain estimated last month.

Federal Reserve Bank of Richmond President Jeffrey Lacker said he expects “a couple more years of sluggish growth” and that the central bank isn’t close to reducing its bond holdings.

“This asset-purchase tapering is just slowing the rate at which we’re increasing the balance sheet,” Lacker, who doesn’t vote on the Federal Open Market Committee this year, said in a Bloomberg Television interview with Peter Cook. “We’re not anywhere near decreasing the balance sheet yet.”

Exporters Climb

Exporters advanced. Samsung Electronics climbed 6.2 percent to 1.339 million won in Seoul. Toyota Motor Corp., the world’s biggest carmaker, rose 3.5 percent to 5,900 yen in Tokyo. James Hardie Industries SE, a supplier of building materials that gets about 70 percent of sales in the U.S., gained 3.5 percent to A$9.66 in Sydney.

China Gas increased 4.8 percent to HK$7.64 after its profit for the year ended March jumped 85 percent to HK$1.76 billion ($227 million), beating the HK$1.51 billion average estimate of 11 analysts compiled by Bloomberg.

Gold miners climbed as bullion increased 1.1 percent, heading for its first advance this week. Newcrest Mining jumped 6.3 percent to A$9.90 in Sydney. Regis Resources Ltd. gained 2 percent to A$3.06.