Asian Stocks Rise on U.S. Outlook; HSBC, BHP Billiton Gain

By Chen Shiyin and Ian C. Sayson


Dec. 11 (Bloomberg) -- Asian stocks advanced, led by HSBC Holdings Plc and BHP Billiton Ltd., on speculation lower interest rates will bolster growth in the world's largest economy.

Sun Hung Kai Properties Ltd. led gains among Hong Kong developers on expectation the city's banks will match any cut in rates by the U.S. Federal Reserve today, fueling demand for real estate. Kookmin Bank paced financial shares higher after UBS AG and Washington Mutual Inc. agreed to sell stakes to investors.

``A rate cut is expected to provide more liquidity into the financial system and that could help the economy stay on a growth path,'' said Park Sehick, who helps manage $6 billion at Hanwha Investment Trust Management Co. in Seoul.

The MSCI Asia Pacific Index added 0.9 percent to 165.05 as of 4:13 p.m. in Tokyo, after retreating yesterday for the first time in four days. About two stocks gained for each that fell.

Japan's Nikkei 225 Stock Average rose 0.8 percent to 16,044.72. Benchmarks advanced in other markets open for trading, except for Thailand, New Zealand and the Philippines.

China Merchants Bank Co. led a decline among the country's lenders on concern accelerating inflation will prompt the central bank to raise interest rates to cool the economy.

Financial shares led a 0.8 percent gain in the U.S. Standard & Poor's 500 Index yesterday. Futures contracts indicate that traders see a 100 percent chance the Fed will cut borrowing costs today by at least a quarter of a percentage point, with a 28 percent chance of a half-point reduction.

Rate Cut

BHP, the world's largest mining company and Australia's biggest oil producer, climbed 1.4 percent to A$44.20. Mitsubishi Corp., Japan's largest trading house, surged 6.1 percent to 3,330 yen.

Crude oil rose as much as 0.6 percent to $88.41 a barrel on the New York Mercantile Exchange today on speculation a Fed rate- cut will prevent the world's largest energy user from sliding into a recession.

Sun Hung Kai, Hong Kong's biggest developer, jumped 3 percent to HK$159.70, halting a four-day, 7.2 percent slump. Cheung Kong (Holdings) Ltd., the city's second-biggest developer by market value, rose 1.9 percent to HK$142.70, also gaining for the first time in five days.

Hong Kong's borrowing costs typically move in step with those in the U.S. because the city's currency is linked to the dollar. Lower rates reduce the costs of mortgages and other credit, helping to sustain demand for real estate. Bets on an interest-rate cut contributed to a 6.6 percent rally in the MSCI regional benchmark in the two weeks through Dec. 7.

UBS, Washington Mutual

HSBC, Europe's largest bank by market value, climbed 1.9 percent to HK$136.30 in Hong Kong. The lender set aside $3.4 billion to cover third-quarter subprime-mortgage and consumer- loan defaults.

UBS jumped yesterday after the bank announced plans to boost its capital base by $11.5 billion. The Zurich-based bank is writing down $10 billion on securities losses in addition to a $4.66 billion markdown announced earlier this year.

``Many investors thought the subprime problem would throw financial markets into chaos, so the boost to UBS's capital base is a positive sign for the market,'' said Masaru Hamasaki, a senior strategist at Toyota Asset Management Co., which oversees $3.3 billion in Tokyo.

Washington Mutual, the biggest U.S. savings and loan, said yesterday it will sell $2.5 billion of convertible stock, after writing down the value of its home lending unit by $1.6 billion in the fourth quarter, while MBIA Inc., the world's biggest bond insurer, said it will raise $1 billion selling a stake to Warburg Pincus LLC.

Kookmin, South Korea's largest lender, jumped 3.7 percent to 69,800 won. Westpac Banking Corp., Australia's fourth-largest bank, gained 2.2 percent to A$29.60.

Home Sales

Meanwhile, the U.S. National Association of Realtors' index of pending sales advanced 0.6 percent, compared with the median forecast of a 1 percent slide in a Bloomberg News survey. The gain followed a revised 1.4 percent increase in September that was bigger than initially estimated.

Sony Corp., which gets about a quarter of its sales from North America, added 2.6 percent to 6,230 yen. Westfield Group, the owner of 59 shopping malls in the U.S., rose 1.6 percent to A$21.95.

Taiwan Semiconductor Manufacturing Co., the world's largest maker of customized chips, added 2.6 percent to NT$62.70. The company said yesterday November sales rose 22 percent from a year earlier.

China Merchants Bank, the nation's largest dual-currency credit-card issuer, dropped 2.1 percent to 39.98 yuan. China Vanke Co., the biggest publicly traded developer, fell 2.4 percent to 32.30 yuan.

Rising Inflation

Consumer prices increased 6.9 percent in November from a year earlier after climbing 6.5 percent in October, China's statistics bureau said today. That was more than the 6.5 percent median estimate of 21 economists surveyed by Bloomberg News.

Surging food and fuel costs and a surplus that climbed to a record $238 billion in the first 11 months of the year have prompted the government to name inflation and overheating as its biggest concerns. The central bank has cracked down on bank lending and raised interest rates five times this year.

Elsewhere, shares of Access Co., a Japanese maker of mobile- phone software, surged 15 percent to 575,000 yen. That's the biggest percentage gain on the MSCI Asian index. Access will team up with NEC Corp. and Matsushita Electric Industrial Co. to develop Linux-based applications for NTT DoCoMo Inc. handsets.