Asian Stocks Advance on Oil's Decline, Japan Machinery Orders

By Chen Shiyin

July 9 (Bloomberg) -- Asian stocks rose, helping the region's benchmark index to its largest rally in three weeks, after crude oil prices retreated and Japan's machinery orders increased more than economists' forecasts.

Korean Air Lines Co. climbed for the first time in 12 days as crude tumbled more than $5 a barrel in New York. Komatsu Ltd., the world's second-largest maker of earthmovers, paced gains in Tokyo. BHP Billiton Ltd., the world's biggest mining company, advanced after aluminum producer Alcoa Inc. posted profit that topped analyst estimates.

The MSCI Asia-Pacific Index added 1.2 percent to 131.91 at 9:10 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 16 percent this year as $400 billion in bank writedowns and credit-related losses offset efforts by central banks to bolster confidence in financial markets.

Japan's Nikkei 225 Stock Average climbed 1.8 percent to 13,264.03. 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.

U.S. stocks advanced yesterday, spurring the Standard & Poor's 500 Index to its largest gain in a month. Financial shares rallied after JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said buyers are returning to some types of mortgage products.

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 were recently at $136.05.

To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net.