Most Asian Stocks Advance; BHP Billiton Gains, ANZ Bank Drops

By Patrick Rial and Kyung Bok Cho

July 28 (Bloomberg) -- Most Asian stocks advanced as commodity producers rose on higher metals prices, countering a slump in financial shares after Australia & New Zealand Banking Group Ltd. said bad loans will reduce profit.

BHP Billiton Ltd., the world's largest mining company, gained in Sydney after gold and copper increased. Yahoo Japan Corp., operator of Japan's most visited Internet portal, climbed as profit increased and analysts raised their ratings. ANZ, Australia's fourth-largest bank, tumbled the most since 1987 after saying fallout from the collapse of the U.S. housing market has spread to Australia and New Zealand.

The MSCI Asia Pacific Index was little changed at 133.02 as of 7:07 p.m. in Tokyo. Almost four stocks rose for every three that declined. The index has tumbled 16 percent this year as banks and securities company posted $468 billion in writedowns and credit-related losses, and raw-materials prices surged.

``We're still bullish on commodities, since prices are supported by emerging-market demand rather than a speculative bubble,'' said Lee Min Koo, head of investment strategy at SH Asset Management Co. in Seoul, which manages the equivalent of $1.9 billion in equities. ``The U.S. housing market is going to take time to recover and before that happens, financials will continue to harbor risk.''

Most Asian benchmark indexes gained. Japan's Nikkei 225 Stock Average added 0.1 percent to 13,353.78. Australia's S&P/ASX 200 Index lost 1 percent. In Pakistan, the Karachi Stock Exchange 100 index tumbled 4.1 percent on speculation the central bank will increase borrowing costs tomorrow. Taiwan was closed today after Typhoon Fung-Wong struck the island.

Economic Data

In the U.S., the Standard & Poor's 500 Index rose 0.4 percent on July 25, paring a weekly retreat, on speculation the worst of the economic slowdown is over after better-than-forecast reports on durable goods orders, consumer confidence and new-home sales. S&P 500 futures were little changed.

BHP gained 2.9 percent to A$38. Mitsubishi Corp., which jointly controls the world's biggest exporter of coking coal with BHP, added 2.6 percent to 3,140 yen. Mitsui & Co., Japan's second-largest trading company, surged 5.7 percent to 2,230 yen. Mitsui gets more than half its earnings from trading commodities.

A measure of six metals traded on the London Metal Exchange, including copper and zinc, added 0.3 percent on July 25, the first gain in three days. Copper rose 0.8 percent, while gold climbed 0.5 percent. Resource prices were given a boost after U.S. durable goods orders unexpectedly rose 0.8 percent in June from the previous month.

`Strong Earnings'

``Trading houses are in one of the few industries that is set to announce some strong first-quarter earnings, and investors are buying into that,'' said Mitsushige Akino, who oversees about $560 million as chief investment officer of Ichiyoshi Investment Management Co. in Tokyo.

Yahoo Japan gained 4.3 percent to 41,700 yen. Net income for the three months ended June 30 rose 18 percent on increased advertising sales and profit from a new subsidiary, the company said. KBC Securities and Deutsche Bank AG raised their recommendations on the stock.

ANZ Banking dropped 11 percent to A$15.81, the lowest level since March 2003. The bank said earnings per share may fall 20 percent to 25 percent in the 12 months to Sept. 30, as the bank tripled provisions for delinquent loans from a year earlier.

Commonwealth Bank of Australia, the nation's largest lender, slumped 5 percent to A$41.10, while St. George Bank Ltd. lost 8.4 percent to A$26.20.

Australia's five biggest banks have lost a combined A$27.4 billion ($26 billion) of market value since July 25, when National Australia Bank Ltd. said provisions for credit investments jumped more than fivefold. The stock fell 2.9 percent to A$25.80, capping a two-day, 16 percent decline.

Profit Forecasts

Honda Motor Co. and Advantest Corp. dropped in Tokyo after forecasting lower earnings, renewing concern that slowing global growth and faster inflation is curbing demand for goods.

Honda, Japan's No. 2 automaker, sank 2.9 percent to 3,650 yen after cutting its operating profit forecast on rising raw material costs and a weaker outlook for truck sales.

Advantest, the world's biggest maker of memory-chip testers, fell 6.1 percent to 2,170 yen, the biggest drop since March 3. The company forecast a loss in the first half on scaled-back investment in factories by chipmakers.

The World Bank lowered last month its global growth forecast for this year to 2.7 percent from a previous estimate of 3.3 percent. Oil surged to a record this month and food prices have climbed by a half between 2007 and 2008, according to the Food and Agriculture Organization of the United Nations.

Output Cut

Samsung Electronics Co., the world's biggest computer-memory maker, dropped 2.8 percent to 560,000 won as five analysts slashed price targets for the shares after the company's earnings missed estimates.

LG Display Co., the world's second-largest maker of liquid- crystal displays, lost 2.7 percent to 30,150 won. The company said yesterday it plans to reduce output by about 10 percent by the end of August because of ``uncertainty'' in the market.

Orica Ltd. plunged 17 percent to A$22.80, the biggest dive since October 1987. The world's largest explosives maker sold about A$600 million of new shares at a discount to help reduce debt and fund growth.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Kyung Bok Cho in Seoul at kcho7@bloomberg.net.