Asian Stocks Advance on Signs U.S. Economy Is Improving

Asian stocks rose, with the regional benchmark index heading for a fifth day of gains, after U.S. manufacturing expanded faster than expected.

Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., climbed 3.6 percent in Hong Kong. Newcrest Mining Ltd., Australia’s largest gold producer, jumped 6.8 percent as the precious metal continued its rebound from a 32-month low. SK Hynix Inc., the world’s second-largest maker of computer memory chips, sank 8.7 percent in Seoul after its equity rating was cut at CLSA Asia Pacific Markets.

The MSCI Asia Pacific Index gained 0.8 percent to 131.92 as of 8:50 p.m. in Tokyo, with about three shares rising for every two that fell. The gauge last week capped its first quarterly slump in a year amid signs of an economic slowdown in China and after Federal Reserve Chairman Ben S. Bernanke said policy makers may start dialing down stimulus if the U.S. economy shows sustained improvement.

“Economic fundamentals in most areas have been improving,” said Angus Gluskie, managing director at White Funds Management in Sydney who helps oversee about $450 million. “Markets have some potential to pick up from here. There’s still a degree of nervousness out there as we’re at the juncture when the Federal Reserve is signaling it may reduce stimulus measures. There’s also a clear change of policy direction in China.”

Japan’s Topix index and the benchmark Nikkei 225 Stock Average both increased 1.8 percent. Singapore’s Straits Times Index advanced 1 percent, while Thailand’s SET Index rose 0.6 percent. New Zealand’s NZX 50 Index climbed 0.9 percent.

Australian Rates

Australia’s S&P/ASX 200 Index jumped 2.6 percent. The nation’s central bank left its key interest rate at a record low, saying a slide in the currency may continue and help to rebalance the economy.

China’s Shanghai Composite Index gained 0.6 percent, erasing earlier losses of as much as 0.8 percent. The nation’s benchmark one-day repurchase rate, a gauge of funding availability in the interbank market, fell about 71 basis points to 3.71 percent, a weighted average shows. That compares with a record high of 13.91 percent on June 20.

“People are breathing a sigh of relief as the worst of the volatility seems to be behind us,” said Tim Condon, head of Asian research at ING Groep NV in Singapore. “Liquidity in China has improved as the interbank rate is coming off highs.”

Hong Kong’s Hang Seng Index dropped 0.7 percent as it resumed trading following yesterday’s holiday. South Korea’s Kospi Index was little changed, while Taiwan’s Taiex index slid 0.3 percent.

The MSCI Asia Pacific Index retreated 9.4 percent through yesterday from the closing level on May 20, which was the highest since June 2008. Shares on the gauge traded at 12.8 times estimated earnings as of yesterday, compared with 14.7 for the Standard & Poor’s 500 Index and 12.8 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

U.S. Futures

Futures on the Standard & Poor’s 500 Index added 0.3 percent after the equity gauge gained 0.5 percent in New York yesterday. The Institute for Supply Management’s manufacturing index increased to 50.9 in June from 49 a month earlier, the group said. The result beat the 50.5 forecast of 85 economists surveyed by Bloomberg, with a reading above 50 showing expansion. Construction spending in the U.S. climbed in May, led by the strongest expenditures on residential projects in more than four years.

Exporters advanced. Li & Fung climbed 3.6 percent to HK$11.04 in Hong Kong. James Hardie Industries SE, a building-materials supplier that counts the U.S. as its biggest market, gained 2.5 percent to A$9.52 in Sydney. Honda Motor Co., a carmaker that gets 46 percent of its sales from North America, added 2.7 percent to 3,800 yen in Tokyo.

Gold Miners

Gold producers rose as bullion gained as much as 0.7 percent today, heading for its third day of advance. Newcrest jumped 6.8 percent to A$10.68. Zijin Mining Group Co., China’s biggest miner of the precious metal, gained 6.6 percent to HK$1.46.

PetroChina Co., the country’s biggest natural-gas producer and supplier, advanced 6.7 percent to HK$8.80, the biggest advance since May 2009. Beijing announced it will raise gas prices for non-residential customers. The stock also rose after being recommended at Morgan Stanley and BNP Paribas SA.

Tokyo Electric Power Co., the utility at the center of the 2011 nuclear disaster, surged 19 percent to 623 yen, the most on the MSCI Asia Pacific Index. The stock surged by its daily limit on a report it will apply to restart reactors at one of its plants.

Among stocks that declined, SK Hynix slumped 8.7 percent to 28,800 won in Seoul. CLSA cut the stock’s rating to sell from outperform, saying earnings may peak this quarter.