By Chen Shiyin and Masaki Kondo
July 9 (Bloomberg) -- Asian stocks rallied the most in three weeks, led by banks and industrial companies, on speculation credit-market losses will ease and after crude oil prices retreated the most since March.
Mitsubishi UFJ Financial Group Inc. and Macquarie Group Ltd. advanced after JPMorgan Chase & Co.'s chief executive officer Jamie Dimon said buyers are returning to some types of mortgage products. Korean Air Lines Co. climbed for the first time in 12 days as crude tumbled more than $5 a barrel. Komatsu Ltd., the world's second-largest maker of earthmovers, gained in Tokyo after Japan's machinery orders rose more than economists forecast.
``The decline in oil gives investors room to breathe,'' Naoki Fujiwara, who oversees the equivalent of $720 million as chief fund manager at Shinkin Asset Management Co., said in Tokyo. ``Crude is the crux of material costs and the drop relieves concern about earnings and a slowdown in the global economy.''
The MSCI Asia-Pacific Index added 1.4 percent to 132.19 at 10:33 a.m. Tokyo time, set for its largest increase since June 16. The benchmark, which slumped to its lowest since November 2006 yesterday, has dropped 17 percent this year as record oil prices and credit-related losses offset efforts by central banks to bolster confidence in financial markets.
Japan's Nikkei 225 Stock Average climbed 1.3 percent to 13,197.59. Benchmark indexes advanced in all other markets open for trading.
U.S. stocks rallied yesterday, spurring the Standard & Poor's 500 Index to its largest gain in a month. Financial shares jumped after JPMorgan's Dimon said that the ``capital side of the crisis will ease'' and Federal Reserve Chairman Ben S. Bernanke said the central bank may extend its emergency-loan program for investment banks into next year.
Mitsubishi UFJ, Japan's largest publicly traded bank, climbed 2.9 percent to 961 yen. Mizuho Financial Group Inc., the third-biggest, rose 4.3 percent to 513,000 yen. Macquarie Group, Australia's No. 1 securities firm, jumped 4.4 percent to A$48.
Biggest Losers
Banks also rose after the regulator for Freddie Mac and Fannie Mae, the largest U.S. mortgage-finance companies, said they have enough capital to survive a slump in the housing market and meet new accounting rules.
A measure of financial companies on MSCI's Asian index has lost 21 percent this year, the biggest retreat among 10 industry groups, as the world's largest banks and securities firms reported writedowns and credit losses of about $403 billion.
Kookmin Bank, South Korea's largest bank, rallied 2.9 percent to 56,600 won, rebounding from yesterday's record 8.6 percent drop. Macquarie Group raised its recommendation to ``outperform'' from ``neutral,'' citing the outlook for second- quarter earnings.
Airlines gained on speculation the retreat in oil will lower costs. Korean Air, South Korea's largest carrier, rose 5.6 percent to 40,800 won, its first gain since June 23. Qantas Airways Ltd., Australia's biggest, gained 3.1 percent to A$3.30.
Oil's Drop
Crude oil for August delivery slumped 3.8 percent to $136.04 a barrel on the New York Mercantile Exchange yesterday, the biggest drop since March 31. Futures, which reached a record high of $145.85 on July 3, have lost 6.4 percent in the previous two days and were recently at $135.90.
Japanese manufacturers received a boost after machinery orders rose at 10 times the pace economists expected in May on higher demand for equipment used to make semiconductors and steel.
Komatsu added 2 percent to 2,810 yen. Fanuc Ltd., Japan's No. 1 maker of industrial robots, jumped 3.2 percent to 9,770 yen, while Sumitomo Heavy Industries Ltd., Japan's largest maker of plastic injection-molding gear, climbed 3.1 percent to 695 yen.
Equipment orders, which signal capital spending in the next three to six months, rose 10.4 percent in May from April, the Cabinet Office said today. That beat the 1.1 percent increase forecast by economists in a Bloomberg News survey.
Canon Inc., the camera maker that said this week it will build its first domestic manufacturing plant in 26 years, added 1.5 percent to 5,360 yen. Sony Corp., the world's second-largest consumer-electronics maker, rose 1.1 percent to 4,470 yen.
The reduction of a planned bond sale hurt Promise Co., which slumped 14 percent to 2,420 yen, the largest retreat on MSCI's regional index. Promise is Japan's second-largest consumer finance company.
To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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