Asian Stocks Advance for First Time in Five Days

By Chen Shiyin

(Corrects previous closing price for Nippon Sharyo.)

Aug. 18 (Bloomberg) -- Asian stocks advanced for the first time in five days, led by industrial and materials companies, after analysts raised their ratings for Komatsu Ltd. and Sumitomo Metal Industries Ltd.

Komatsu, the world's second-largest earthmover maker, jumped 4.7 percent after Nikko Citigroup Ltd. advised investors to buy the shares. Sumitomo Metal, Japan's third-biggest steelmaker, rose 6.7 percent as Mitsubishi UFJ Securities Co. upgraded the stock. BHP Billiton Ltd., the world's largest mining company, climbed 2.2 percent in Sydney on speculation it will report higher profit later today.

The MSCI Asia-Pacific Index added 1.2 percent to 126.39 as of 10:54 a.m. in Tokyo, halting a four-day, 3 percent drop. The measure has slumped 20 percent this year as soaring inflation slowed global economic growth and the world's largest financial companies posted writedowns and credit losses of more than $500 billion.

Japan's Nikkei 225 Stock Average added 1.7 percent to 13,240.95. Benchmarks rose in most other Asian markets open for trading except China. Indonesia and the Philippines are closed for holidays.

Nippon Sharyo Ltd., Japan's biggest maker of high-speed trains, was poised to rise in Tokyo trading after Central Japan Railway Co. offered to take a majority stake.

U.S. stocks rose on Aug. 15, sending the Standard & Poor's 500 Index to its third weekly gain. Wal-Mart Stores Inc. led retailers higher after crude prices retreated, while Ambac Financial Corp. and MBIA Inc. climbed after S&P affirmed its credit ratings for the two largest bond insurers.

Komatsu's Upgrade

Komatsu jumped 110 yen to 2,465, on course for its largest gain since April 21. Nikko Citigroup analyst Yoshinao Ibara upgraded his rating to ``buy'' from ``hold,'' saying the company is countering risks of a slowdown in developed countries by tapping demand from ``resource-rich countries'' including Central and South America, Asia, Australia and the Middle East.

Measures tracking industrial and materials stocks on the MSCI Asia-Pacific Index are valued at less than 13 times reported earnings, the cheapest among the broader measure's 10 industry groups. They're also the region's worst performers in the past month, sliding 5 percent and 7.5 percent, respectively.

Sumitomo Metal Industries rallied 30 yen to 478, poised for its largest advance since March 19. Mitsubishi UFJ Securities raised its rating to ``outperform'' from ``market perform,'' saying that higher seamless-pipe prices will boost earnings in the second half.

Dongkuk Steel Mill Co., South Korea's third-largest steelmaker, added 1.1 percent to 42,950 won after UBS AG raised its share-price estimate by 13 percent, citing ``very strong'' second-quarter earnings.

BHP, Nippon Sharyo

BHP rose 2.3 percent to A$38.84, the highest since Aug. 1, ahead of the release of its results today. Net income may climb to $9.4 billion in the six months ended June, compared with $7.25 billion a year ago, according to Bloomberg calculations from the mean estimate of 11 analysts for full-year profit.

Nippon Sharyo was poised to rise to as much as 283 yen, after closing at 268 yen on Aug. 15, as buy orders overwhelmed sell orders. Central Japan, the country's largest operator of bullet trains, offered to pay up to 370 yen a share to raise its stake of outstanding shares to 50.1 percent from 1.8 percent.

Central Japan fell 0.6 percent to 1.084 million yen.

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