Asian Stocks Gain for 3rd Day on Rate Cuts, Commodities Rally

By Kyung Bok Cho

Oct. 30 (Bloomberg) -- Asian stocks rose after China, Taiwan and the U.S. cut interest rates to alleviate a credit freeze and boost growth, spurring a rally in commodity prices.

Posco gained 8.5 percent and Hyundai Heavy Industries Co. jumped 11 percent in Seoul after the U.S. Federal Reserve included emerging markets for the first time in a liquidity-swap agreement. BHP Billiton Ltd. advanced after oil jumped and copper posted its biggest gain in two years. Toyota Motor Corp. added 4 percent as a weaker yen boosted its earnings outlook.

The MSCI Asia Pacific Index added 1.9 percent to 82.23 as of 9:22 a.m. in Tokyo. Today's advance pared the Asian measure's monthly loss to 23 percent. The gauge is still on course to complete the worst month since its creation in December 1987.

Japan's Nikkei 225 Stock Average climbed 3.3 percent to 8,478.81. South Korea's Kospi index gained as much as 7.4 percent, while a surge in index futures triggered a halt in program trading.

U.S. stocks declined yesterday, with the Standard & Poor's 500 Index erasing a 3.1 percent advance in the final 12 minutes on concern lower interest rates won't stem a recession. Futures on the U.S. benchmark index rose 0.7 percent.

Central banks across the globe are trying to curb an economic slowdown as the financial crisis weighs on consumer sentiment and business spending. The Fed and the People's Bank of China yesterday cut benchmark interest rates to stimulate demand, while Taiwan's central bank today lowered its benchmark rate.

Liquidity, Stimulus

The Fed said yesterday it agreed to provide $30 billion to the central banks of South Korea, Singapore, Brazil and Mexico, ``four large systemically important economies,'' in a statement. The arrangements aim ``to mitigate the spread of difficulties in obtaining U.S. dollar funding.''

Japan's Prime Minister Taro Aso will announce economic stimulus measures worth 5 trillion yen ($51 billion) today, the Yomiuri newspaper said. The package will include 2 trillion yen in assistance for households, according to the report.

Copper futures for December delivery surged 12 percent in New York yesterday, the steepest jump in two years, while crude oil for December delivery climbed 7.6 percent to $67.50 a barrel.

To contact the reporter for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.net