Markets

Asian stocks in biggest weekly gain this year on US policy move

By Hanny Wan (China Daily)
Updated: 2010-11-08 09:49

HONG KONG - Asian stocks rose last week, driving up the benchmark index by the most this year, on optimism the US Federal Reserve will succeed in stoking growth in the world's biggest economy.

Mitsubishi Corp, Japan's biggest commodities trader, advanced 7.8 percent in Tokyo as oil and metal prices climbed. Cnooc Ltd, China's biggest offshore oil explorer, jumped 10 percent in Hong Kong. BHP Billiton Ltd and Rio Tinto Group, the world's No 1 and No 3 mining companies, climbed more than 5 percent in Sydney. Nissan Motor Co, Japan's No 3 carmaker, gained 7.6 percent after reporting higher-than-expected earnings and raising its profit forecast.

"We're seeing follow-through strength in risky assets, suggesting that not all of the US quantitative-easing news was in the price," said Prasad Patkar, who helps manage about $1.8 billion at Platypus Asset Management Ltd in Sydney.

"The market had been expecting a second round of easing, but it appears the rumor wasn't bought to the extent feared.

"That's why we're not seeing any selling," he added.

The MSCI Asia Pacific Index rose 4.2 percent this week to 134.82, its steepest increase since the five days ended Dec 4.

The gauge has risen about 12 percent in 2010 on speculation profits will weather Europe's debt crisis, China's steps to curb property price gains and concern about the pace of US economic growth. Shares in the gauge trade at an average of about 15 times estimated earnings, the highest level since June.

Fed measures

Netizens give QQ thumbs down Related readings:  Asian stocks to benefit from 'crack up' boom  Mainland stocks fall on concerns over inflation  Farming stocks rising  Rally in Chinese stocks 'has legs'

The MSCI index had its biggest two-day gain since May and equity markets rose worldwide after the Federal Reserve said Nov 3 that it will purchase as much as $600 billion of assets through June, expanding record measures to support the US economy.

Japan's Nikkei 225 Stock Average climbed 4.6 percent in the four days it was open last week. Hong Kong's Hang Seng Index surged 7.7 percent, South Korea's Kospi Index gained 3 percent.

China's Shanghai Composite Index surged 5.1 percent. Australia's S&P/ASX 200 Index rose 3 percent.

Mitsubishi, which gets more than 40 percent of its sales from metals and energy, gained 7.8 percent to 2,086 yen last week. In Hong Kong, Cnooc jumped 10 percent to HK$17.68 and Jiangxi Copper Co, China's largest producer of the metal, advanced 16 percent to HK$25.10. Rio Tinto increased 5.5 percent to A$87.20. BHP advanced 8 percent to A$45.27. Canadian regulators blocked BHP's hostile bid for Potash Corp of Saskatchewan Inc.

Crude oil for December delivery advanced to as much as $87.22 a barrel before Asia's main markets closed for the week, the highest price since October 2008.

The London Metal Exchange Index of prices for six industrial metals jumped 4.8 percent last week before Asian trading closed.

Bloomberg News