Asian Stocks Advance for Fourth Day as Oil Falls; Sony Gains

By Chua Kong Ho and Ian C. Sayson

July 24 (Bloomberg) -- Asian stocks advanced for a fourth day as the dollar's rebound and declining commodity prices bolstered automakers and consumer-electronics manufacturers.

Sony Corp. gained in Tokyo as the U.S. currency traded near a one-month high, boosting the value of dollar-denominated sales. Honda Motor Co. rose after European carmakers' results beat estimates. Cathay Pacific Airways Ltd. surged as oil traded near the lowest in seven weeks. Bridgestone Corp., the world's largest tiremaker by sales, climbed after rubber prices fell.

``We aren't out of the woods yet but things are not as bad as previously feared,'' said Jason Chong, who helps manage $1.5 billion as chief investment officer at UOB-OSK Asset Management in Kuala Lumpur. ``A continued decline in oil prices would mean lower inflation and costs going forward and that's good for companies.''

The MSCI Asia Pacific Index gained 1.3 percent to 136.68 as of 5:35 p.m. in Tokyo, set for its highest close since June 30. The measure has jumped 5.8 percent this week, heading for its biggest weekly advance since the five days to Aug. 24, when the U.S. cut its discount lending rate. About three stocks rose for each that declined, with eight of the index's 10 groups advancing.

Japan's Nikkei 225 Stock Average climbed 2.2 percent to 13,603.31. Most benchmark indexes in Asia advanced. The Philippine Stock Exchange Index jumped 3 percent, the most since Aug. 30, on speculation the nation's citizens abroad will send more money home. Standard & Poor's 500 Index futures fell 0.2 percent.

Market Rally

MSCI's Asian index, which closed at its lowest level since October 2006 last week, has rallied since Citigroup Inc. and JPMorgan Chase & Co. reported results that topped analyst estimates and oil tumbled 16 percent from a record $147.27 a barrel on July 11.

The S&P 500 rose 0.4 percent in the U.S. yesterday, after oil retreated and earnings reports from AT&T Inc. and Pfizer Inc. eased concern that the profit slump will worsen.

Commonwealth Bank of Australia, the largest Australian provider of home loans, led financial companies higher today after U.S. lawmakers approved a rescue plan for embattled mortgage lenders Fannie Mae and Freddie Mac.

Honda, which gets about 70 percent of its operating profit from North America, added 3.8 percent to 3,840 yen. Toyota added 5.1 percent to 5,120 yen, after saying yesterday preliminary second-quarter sales rose about 2 percent on higher demand in China and other emerging markets.

European automakers Volkswagen AG, PSA Peugeot Citroen and Fiat SpA reported earnings yesterday that beat analysts' estimates and forecast higher revenue as fuel costs spurred sales of compact cars.

Dollar Effect

The dollar climbed to 107.98 against the yen earlier, the highest since June 26. It was recently little changed. Every 1 yen gain against the dollar reduces Honda's annual operating profit by 20 billion yen and Toyota's by 40 billion yen, according to the automakers.

Sony, the maker of the Playstation 3 game machine, gained 3.9 percent to 4,550 yen. Canon Inc., the world's biggest maker of digital cameras, advanced 3.7 percent to 5,360 yen.

``The stronger dollar shows confidence that the outlook for the U.S. economy is improving, and should make some Asian exports more competitive,'' said Simon Bonouvrie, who helps manage about $1.6 billion as a portfolio manager at Platypus Asset Management in Sydney.

Cathay Pacific, Hong Kong's biggest airline, gained 1.3 percent to HK$15.84, extending yesterday's 6.3 percent surge. China Southern Airlines Co., the nation's largest carrier, added 7.9 percent to HK$3.70, its biggest two-day advance since November 2006.

Crude Declines

Oil fell 3.1 percent to $124.44 a barrel yesterday, dropping below $125 for the first time in six weeks, after a U.S. government report showed that fuel stockpiles increased. Crude prices are little changed today.

Woodside Petroleum Ltd., Australia's second-largest oil and gas producer, fell 6.1 percent to A$52.54. Inpex Holdings Inc., the biggest Japanese oil explorer, dropped 4.3 percent to 1.059 million yen.

A measure of energy stocks has declined 6.9 percent this month, the most among the 10 industry groups, as the stronger U.S. dollar limited the appeal of commodities as a hedge against inflation and high prices cut fuel consumption.

Commonwealth Bank added 4 percent to A$46.39. Mitsubishi UFJ Financial Group Inc., Japan's biggest bank by market value, advanced 2.2 percent to 1,032 yen.

Annual Decline

A measure of Asian financial companies has soared 8.8 percent this week, set for its biggest weekly gain since August. The surge in financial stocks helped pare the MSCI's Asian index's decline this year to 14 percent from 18 percent reached last week. The benchmark gauge has tumbled as the world's largest banks and securities firms reported more than $467 billion of writedowns and credit losses, and as oil prices soared.

Bridgestone gained 3.5 percent to 1,849 yen, the highest since June 20, while Yokohama Rubber Co., Japan's second-largest tiremaker, added 3.3 percent to 533 yen after natural rubber futures in Tokyo dropped to the lowest in seven weeks. JSR Corp., a maker of synthetic rubber, gained 7.5 percent to 2,060 yen, after saying profit increased on higher product prices.

Newcrest Mining Ltd., Australia's largest gold mining company, slumped 5.5 percent to A$29.40, after saying fourth- quarter bullion output fell due to a natural gas shortage. BHP Billiton Ltd., the world's largest mining company, dropped 2.9 percent to A$37.55. Gold fell yesterday the most in six weeks.

To contact the reporters for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net; Ian C. Sayson in Manila at isayson@bloomberg.net