By Patrick Rial and Shani Raja
Sept. 8 (Bloomberg) -- Asian stocks surged the most in eight months and U.S. futures jumped after the U.S. government seized control of Fannie Mae and Freddie Mac, shoring up global financial markets reeling from more than $500 billion in credit losses.
Sumitomo Mitsui Financial Group Inc. posted its biggest rise ever and Macquarie Group Ltd. climbed 15 percent, driving a measure of financial shares to the largest gain in 10 years, after the takeover of the two-biggest U.S. mortgage guarantors cut credit risk. Origin Energy Ltd. jumped to a record after ConocoPhillips said it will join Origin's natural gas venture. Toyota Motor Corp. added 4 percent after the yen weakened following the largest measure yet taken by officials to limit the credit crisis's fallout.
``It draws a line under the recent problems,'' said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors, which manages about $108 billion. ``It's very positive for the banking sector in particular, which has been beaten down quite badly.''
The MSCI Asia Pacific Index climbed 4.5 percent, the most since January, to 122.05 as of 3:36 p.m. in Tokyo, with financial companies accounting for almost half of that gain. The measure on Friday closed at its lowest level since June 13, 2006.
Japan's Nikkei 225 Stock Average rose 3.4 percent to 12,624.46, led by Toyota and robot-maker Fanuc Ltd.
Taiwan's Taiex Index jumped 5.6 percent, the biggest gain in Asia and the gauge's steepest rally since October 2002, after the government said it may take action to boost stock prices and spending. Li & Fung Ltd. led Hong Kong equities higher after selling a stake to Singapore's Temasek Holdings Pte.
Futures Rally
More than $17 trillion in global equity value has been wiped out since October as the credit crisis and U.S. housing recession dragged economies worldwide. Investors had worried failures by Fannie and Freddie, which hold more than $1.5 trillion in assets and almost the same amount of debt, would spark further losses at financial institutions around the world.
S&P 500 futures expiring in September climbed 2.7 percent to 1,275.00, the steepest advance since April 1.
Sumitomo Mitsui, Japan's third-biggest listed bank, rallied 15 percent to 674,000 yen, the steepest advance since listing in 2002. Macquarie, Australia's biggest investment bank which has lost half its value since its 2007-peak, rose 15 percent to A$48.31. Woori Finance Holdings Co., which control's South Korea's second-largest bank, advanced 15 percent to 15,000 won, the biggest gain on record.
``The market likes less uncertainty and this takes care of that,'' said E. William Stone, who oversees $66 billion as chief investment strategist at PNC Wealth Management in Philadelphia. ``If this helps re-stabilize the housing situation it's got to be looked at as a positive.''
Lower Risk
The cost to protect Asia-Pacific corporate bonds from default fell by the most in about five months, credit-default swaps show. MSCI's Asia Pacific financial stock index jumped 6.7 percent, poised for its biggest gain since October 1998.
Nomura Holdings Inc., Japan's No. 1 investment bank, advanced 9.7 percent to 1,501 yen after the Yomiuri newspaper said on Sept. 6 the company may bid for a stake in Lehman Brothers Holdings Inc. Orix Corp., Japan's largest leasing company, rallied 15 percent for the biggest gain since 1986 to 13,700 yen, paring its loss for the year to 28 percent.
Fannie and Freddie, which make up almost half the U.S. home- loan market, were seized after the biggest surge in mortgage defaults in at least three decades, Treasury Secretary Henry Paulson said in Washington. Shares in both companies fell more than 80 percent since the start of the year.
Exporters Climb
``Had the U.S. mortgage-financing companies failed, it would have triggered a substantial financial crisis across the globe,'' said Naoki Fujiwara, who oversees about $720 million as chief fund manager at Tokyo-based Shinkin Asset Management Co. The takeovers ``have eliminated concerns among investors and boosted confidence the financial market will stabilize.''
Toyota climbed 4 percent to 4,940 yen. The world's No. 2 automaker also rose after the yen weakened against the dollar and the euro. Samsung Electronics Co., the biggest computer-memory maker, added 4.4 percent to 543,000 won.
Raw materials producers jumped as the takeover of Fannie and Freddie lifted confidence global growth will be sustained, supporting commodities prices. Citic Resources Holdings Ltd., a Chinese metal producer turned oil supplier, surged 15 percent to HK$1.66. Fortescue Metals Group Ltd., Australia's third-largest iron ore producer, rallied 11 percent to A$7.10.
Origin, Australia's biggest producer of gas from coal seams, gained 13 percent to A$17.65 after ConocoPhillips, the second- biggest U.S. oil refiner, agreed to pay as much as $8 billion to join a natural gas venture in Queensland.
Li & Fung, which sells clothes, toys and home furniture to Wal-Mart Stores Inc., surged 10 percent to HK$24.90 after Temasek, Singapore's government-owned investment company, agreed to pay HK$3.88 billion ($497 million) for new shares in the company.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.
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