Asian Stocks Climb as Oil, Metals Prices Rally; Westpac Gains
June 10 (Bloomberg) -- Asian stocks rose for the first time in three days, led by commodity and shipping companies as oil climbed above $70 a barrel and metals prices advanced.
Fortescue Metals Group Ltd., Australia’s third-largest iron ore producer, jumped 9 percent, while Mitsubishi Corp., a trading company that gets more than half its profit from commodities, climbed 4.6 percent in Tokyo. Westpac Banking Corp., Australia’s largest bank by market value, added 1.6 percent after a consumer confidence index jumped by the most in 22 years.
“Investors are focusing more on the possibility that the economy is emerging from its worst period,” said Yoshihiro Ito, senior strategist at Tokyo-based Okasan Asset Management Co., which oversees the equivalent of $7.7 billion. “Improved sentiment is resulting in this resilient market.”
The MSCI Asia Pacific Index gained 1.4 percent to 103.59 as of 11:31 a.m. in Tokyo, following a two-day, 1.2 percent drop. The gauge has surged 47 percent from a five-year low on March 9 as equities from Mumbai to Shanghai rallied on rising confidence the worst of the global recession is over.
Japan’s Nikkei 225 Stock Average added 1 percent as Mitsui O.S.K. Lines Ltd., Japan’s second-biggest bulk shipper, surged 5.3 percent after Credit Suisse Group and Deutsche Bank AG both recommended buying the sharers. Stocks climbed in markets open for trading throughout the region.
Futures on the Standard & Poor’s 500 Index rose 0.1 percent. Most U.S. stocks rose yesterday, lifting the S&P 500 up by 0.4 percent as a better-than-estimated forecast at Texas Instruments Inc. spurred gains in technology companies.
Mining Companies
Stocks in the MSCI Asia are now valued at 23.8 times estimated earnings, while analyst profit forecasts have been increasing since the end of March, according to data compiled by Bloomberg. Nomura Holdings Inc. yesterday narrowed its profit decline forecast for Japan’s non-financial companies.
Fortescue soared 9 percent to A$3.39 in Sydney. Mitsubishi Corp. added 4.6 percent to 1,962 yen. BHP Billiton Ltd., the world’s largest mining company and Australia’s top oil producer, jumped 3.1 percent to A$37.63.
Crude oil rose 2.8 percent to $70.01 a barrel yesterday in New York, the highest settlement since Nov. 4. A gauge of six metals jumped 3.8 percent in London, the most since June 1. Copper surged 5 percent in New York.
“Higher commodity prices overseas will spur people here to snap up resource shares,” said Hiroichi Nishi, general manager at Nikko Cordial Securities Co. in Tokyo.
Best Performers
Measures of energy and material stocks have been the top performers among the MSCI Asia Pacific Index’s 10 industry groups in the past month on speculation demand for commodities will increase as global growth picks up.
Signs of a global recovery have increased in recent weeks, fueling the stock rally since March. Australia unexpectedly reported growth in its economy last week, while Japan two weeks ago raised its assessment of the economy for the first time in three years. The International Monetary Fund said in April it expects Asia’s developing markets to grow 4.8 percent in 2009, compared with a global contraction of 1.3 percent.
An Australian consumer sentiment index compiled by Westpac and the Melbourne Institute that was released today showed an increase of 12.7 percent in June from the previous month to 100.1 points. It’s the first time since January 2008 that the index was above 100, indicating optimists outnumber pessimists.
Westpac gained 1.6 percent to A$19.66. Commonwealth Bank of Australia, the nation’s second-biggest lender, added 1.5 percent to A$37.53. Harvey Norman Holdings Ltd., Australia’s biggest electronics retailer, climbed 2 percent to A$3.09.
‘Investment Opportunity’
Mitsui O.S.K. rallied 5.2 percent to 689. Osuke Itazaki at Credit Suisse and Deutsche Bank’s Seigo Ando recommended investors buy the shares in reports yesterday.
“Any short-term reduction in share prices is an investment opportunity,” Itazaki wrote. “If the March 2010 fiscal year marks the bottom for earnings, then there is a strong possibility of an upturn in the basic share price trend.”
Kawasaki Kisen Kaisha Ltd., Japan’s third-biggest shipping line, jumped 5.5 percent to 445 yen, while Nippon Yusen K.K., the largest, rose 3.4 percent to 452 yen, after Itazaki gave “outperform” ratings to both.
