Sunday, December 7, 2008

Asian Stocks Rise on U.S., India Stimulus Plans; Tata Climbs

By Chua Kong Ho and Ian C. Sayson

Dec. 8 (Bloomberg) -- Asian stocks and U.S. index futures advanced after U.S. President-elect Barack Obama pledged the biggest public works program in about 50 years and India lowered interest rates.

Komatsu Ltd., the world’s No. 2 maker of construction machinery, jumped 11 percent after Obama said he’s planning the largest spending package since President Dwight D. Eisenhower created the interstate highway system. Tata Motors Ltd., India’s biggest truckmaker, rose 9.7 percent as the government unveiled a $4 billion stimulus plan. Hong Kong Exchanges & Clearing Ltd. surged 17 percent after the financial secretary said a plan permitting Chinese to buy the city’s shares is still on track.

“Governments, not only the U.S., must spend to replace the growth that will be lost from weak consumer spending,” said Jonathan Ravelas, a strategist at Banco de Oro Unibank Inc. in Manila, which has more than $6 billion in trust assets under management. “Investors have been waiting for this kind of stimulus to cushion the effects of a global slowdown.”

The MSCI Asia Pacific Index gained 4.5 percent to 83.13 as of 2:41 p.m. in Tokyo, the most since Nov. 5. About 17 stocks rose for each that declined. The measure fell 3.8 percent last week as commodity prices slumped amid signs the global recession is deepening. The gauge is valued at 12 times estimated profit, almost a third below its level at the start of 2008.

Japan’s Nikkei 225 Stock Average advanced 5.4 percent to 8,341.67. Mizuho Financial Group Inc. rose after loan growth at the country’s banks accelerated in November as the global credit crisis shut companies out from the bond market.

Government Support Measures

Hong Kong’s Hang Seng Index surged 7.5 percent. Australia’s S&P/ASX 200 Index jumped 4.1 percent, led by Santos Ltd., the country’s third-biggest oil and gas producer, amid takeover speculation. South Korea’s Kospi Index climbed 8 percent. Most markets open for trading in the region advanced, with Singapore, Indonesia and Malaysia closed for public holidays.

Governments worldwide have introduced measures this year to buttress their economies against the worst financial crisis since the Great Depression. Australia will start making one-time payments to families and pensioners as part of its $6.8 billion stimulus package from today, ministers said. Chinese leaders begin their annual economic conference in Beijing today.

Futures on the Standard & Poor’s 500 Index climbed 2 percent today. The stock gauge climbed 3.7 percent on Dec. 5 as insurer Hartford Financial Services Group Inc. increased its profit forecast and said it’s weathering the credit turmoil.

U.S. Stimulus

Komatsu, which counts the Americas as its biggest overseas market, jumped 11 percent to 1,007 yen, snapping a five-day, 21 percent decline. Westfield Group, the shopping center owner that derived 39 percent of its 2007 sales from the U.S., climbed 4 percent to A$13.75.

Obama said on Dec. 6 will boost investment in roads, bridges and public buildings to create and preserve 2.5 million jobs. U.S. companies cut payrolls at the fastest pace in 34 years, with the unemployment rate rising to the highest level since 1993, reports last week showed.

“At the moment governments are the only ones feeding cash into the system,” said Masaru Hamasaki, who helps oversee about $3.3 billion at Toyota Asset Management Co. in Tokyo. “It’s a fair bet to say the policies of the U.S. will support demand.”

Tata Motors added 9.7 percent to 168 rupees. Housing Development Finance Corp., India’s biggest mortgage lender, rose 5.4 percent to 1,507.05 rupees. The Reserve Bank of India on Dec. 6 cut its repurchase rate to 6.5 percent from 7.5 percent on Dec. 6. The government said yesterday it will spend an extra 200 billion rupees ($4 billion) in the year ending March 31.

China Banks

Hong Kong Exchanges, which manages Asia’s third-largest bourse, surged 17 percent to HK$71.80. China’s so-called “through train” plan that allows the country’s citizens to buy Hong Kong stocks is “something that will come,” Hong Kong Financial Secretary John Tsang said at a forum in the city.

In Japan, Mizuho Financial added 4 percent to 219,100 yen. Sumitomo Mitsui Financial Group Inc. gained 3 percent to 305,000 yen. Loans, excluding those by credit associations, rose 3.6 percent in November from a year earlier after growing 2.3 percent in October, the Bank of Japan said today.

Lenders also advanced as the cost to protect Australian and Japanese bonds against default declined. Commonwealth Bank of Australia climbed 6.2 percent to A$32.80. National Australia Bank Ltd. added 5.8 percent to A$20.96.

The Markit iTraxx Japan index fell 3 basis points to 370 in Tokyo, according to prices from Credit Suisse Group. The Markit iTraxx Australia index was quoted 10 basis points lower at 390 basis points, Citigroup Inc. data show. A hundred basis points make up one percentage point.

Santos, Woodside

Chinese banks advanced after the China Securities Journal reported on Dec. 5 that the government is considering cutting the business tax imposed on banks’ revenue to 3 percent from the current 5 percent.

Industrial & Commercial Bank of China Ltd., the nation’s largest bank, climbed 7.9 percent to HK$4.39 in Hong Kong. China Construction Bank Corp., the No. 2 lender, added 8.6 percent to HK$4.79, while Bank of China Ltd. rose 6.4 percent to HK$2.50.

Santos gained 9.1 percent to A$13.25, snapping a five-day losing streak. China National Petroleum Corp., the parent of Hong Kong-listed PetroChina Co., is considering linking with a partner to bid for Santos, the South China Morning Post reported.

Aeon Co., Japan’s largest supermarket operator, jumped 7.3 percent to 888 yen, the most since Nov. 10. Mitsubishi Corp., Japan’s biggest trading house, will purchase a stake of about 5 percent in Aeon and form an alliance to buy and distribute goods and open stores, two people familiar with the matter said Dec. 6.

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