By Chen Shiyin and Patrick Rial
July 17 (Bloomberg) -- Asian stocks rose, giving the region's benchmark index its biggest gain in a month, on speculation credit losses will ease and after oil prices tumbled.
HSBC Holdings Plc, Europe's largest bank by value, rebounded from a five-month low in Hong Kong after Wells Fargo & Co., the No. 2 U.S. mortgage lender, reported earnings that topped analyst estimates. Sony Corp. gained the most in three weeks in Tokyo after Credit Suisse Group said Japanese equities provide a hedge against credit-market turmoil. Air China Ltd. rallied following the biggest two-day drop in crude-oil prices since January 2007.
``There's a feeling now that the market has already taken account of any bad news on financials,'' Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which manages about $94 billion, said in an interview with Bloomberg Television. ``Wells Fargo's profit came as a positive surprise.''
The MSCI Asia-Pacific Index added 1.4 percent to 131.24 at 4:11 p.m. Tokyo time, ending a three-day slump that dragged the benchmark to a 21-month low. Almost three stocks rose for each one that fell. The index, set for its biggest gain since June 16, has lost 17 percent this year after the world's top banks and securities firms reported writedowns and credit losses exceeding $422 billion, and commodity prices jumped.
Japan's Nikkei 225 Stock Average increased 1 percent to 12,887.95, and equity indexes advanced in most markets open for trading. Pakistan's benchmark index slumped 4.2 percent, set for its 15th day of declines as investors stoned the stock exchange in protest at collapsing share values. Thailand is closed today.
U.S. stocks rallied yesterday, helping the Standard & Poor's 500 Index rebound from its lowest since 2005, after Wells Fargo's earnings and the slump in crude overshadowed a government report showing the fastest increase in consumer prices since 2005. S&P 500 Index futures slipped 0.2 percent today.
Banks Gain
HSBC, which got 26 percent of its 2007 revenue in North America, rose 2.8 percent to HK$116 in Hong Kong. It closed yesterday at the lowest since Feb. 20. Mitsubishi UFJ Financial Group Inc., the No. 1 Japanese bank by value, gained 3 percent to 955 yen.
``The market is looking for any indication the crisis is ending,'' said Scott Rundell, head of credit research at ING Investment Management in Sydney. ``Wells Fargo is one result and shows the equity market is crying out for something positive.''
The MSCI Asia-Pacific Index's measure of financial companies gained 2.9 percent today, accounting for more than half the broader gauge's advance. The finance measure has tumbled 21 percent this year, the most among 10 industry groups.
The gauge slumped 4.6 percent in the previous three days, to its lowest since December 2005 on concern losses will swell at Fannie Mae and Freddie Mac, the struggling U.S. mortgage- financing companies that the Treasury has pledged to support.
Japan Stocks
Sony, the world's second-largest maker of consumer electronics, added 2.3 percent to 4,390 yen, its largest increase since June 26. Toyota Motor Corp., Japan's biggest automaker, gained 0.9 percent to 4,680 yen. Nomura Holdings Inc., the nation's biggest brokerage, jumped 5 percent to 1,531 yen.
Japanese stocks were raised to ``neutral'' from ``underweight'' by Andrew Garthwaite, chief strategist at Credit Suisse Group. Japan's market provides a hedge against inflation, higher oil prices, and turmoil in credit markets, Garthwaite said in a note to clients. The Topix index has lost 14 percent in 2008, making Japan the best-performing market in Asia after Sri Lanka.
Air China, the nation's largest international carrier, rallied 5.1 percent to HK$4.15 in Hong Kong. Korean Air Lines Co., South Korea's No. 1 carrier, surged 4.8 percent to 43,500 won, while Qantas Airways Ltd., Australia's biggest, gained 4.1 percent to A$3.30.
Lower Oil, Metals
Crude oil for August delivery fell 3 percent yesterday in New York. Futures completed a two-day, 7.3 percent slump, the most since January 2007, and were at $134.95 today. Separately, copper futures fell to a one-month low, while gold tumbled the most in three weeks.
A report today showing that China's economy grew 10.1 percent last quarter, the slowest pace since 2005, added to speculation metal and oil prices will retreat as demand wanes. China is the world's largest user of copper and the second- biggest consumer of crude oil.
BHP Billiton Ltd., the world's largest mining company and Australia's No. 1 oil producer, fell 4.4 percent to A$37.55. Paladin Energy Ltd., a producer of uranium in Namibia, slumped 8.5 percent to A$5.81, the largest drop on MSCI's Asian index.
Pakistan's Karachi Stock Exchange 100 Index fell today as hundreds of investors gathered at the bourse to protest against a slump that has dragged the benchmark measure down by 29 percent this year.
Regulators on July 14 eased curbs on trading, including a restriction on price declines to 1 percent that had been in effect since June 24. Financial stocks paced today's drop, with MCB Bank Ltd., the country's No. 2 lender, falling 5 percent to 245.34 rupees.
To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net; Patrick Rial in Tokyo at prial@bloomberg.net.
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