Asia Stocks Rise for Second Week on Rate Cuts, Obama Victory

By Kyung Bok Cho and Chan Tien Hin

Nov. 8 (Bloomberg) -- Asian stocks rose for a second week, the first consecutive gain in six months, after central banks cut interest rates and Barack Obama's presidential victory in the U.S. sparked speculation his spending plans will stimulate growth.

Mizuho Financial Group Inc. jumped 20 percent, the best week since 2003, as Japan's three-month interbank rate tumbled the most in almost a decade. Shinhan Financial Group Ltd. gained 16 percent after South Korea pledged to pump $10.5 billion into its economy and the Bank of Korea lowered rates for the third time in a month. Nintendo Co., the world's biggest maker of handheld video-game consoles, rallied 7 percent after the election of Obama, who has urged Congress to pass a $175 billion economic stimulus bill.

``The stability of financial markets has been restored somewhat,'' said Hideyuki Ookoshi, who helps oversee about $365 million at Chiba-Gin Asset Management Co. in Tokyo. ``Investors are keeping a keen eye on government efforts to shore up banks' capital, which is the key to the recovery of global economies.''

The MSCI Asia Pacific Index added 1.5 percent to 87.23 in the five days to Nov. 7. It's the first time the gauge has risen for consecutive weeks since May. A measure of financial companies climbed 5.1 percent, the most among the index's 10 industry groups.

Japan's Nikkei 225 Stock Average rose 0.1 percent to 8,583.00, paring earlier gains as Toyota Motor Corp. lost 7.2 percent after the automaker slashed its profit forecast by 56 percent. Thailand's SET Index advanced 11 percent after protests by supporters of exiled former Prime Minister Thaksin Shinawatra ended peacefully, easing concern that political instability will continue.

Lending Rates Fall

MSCI's Asian index has lost 45 percent this year, exceeding declines for benchmark indexes in the U.S. and Europe, as the 15- month credit crisis curtailed lending, and fund redemptions and currency market volatility prompted an exodus of capital from the region.

Mizuho, Japan's second-largest bank, surged 20 percent to 278,000 yen, the biggest weekly advance since November 2003. Sumitomo Mitsui Financial Group Inc., the nation's third-largest lender, climbed 10 percent to 420,000 yen.

The Tokyo interbank offered rate, or Tibor, fell 9.8 basis points to 0.791 percent on Nov. 4, the most since December 1999, according to the Japanese Bankers Association. The Bank of Japan last week cut the key overnight lending rate to 0.3 percent from 0.5 percent, its first reduction in more than seven years.

China Construction Bank Corp., the nation's second largest, added 6.3 percent to HK$4.03 in Hong Kong. The city's three-month interbank offered rate declined to a six-week low on Nov. 3.

Rate Cuts

Shinhan, which runs South Korea's third-largest bank, added 16 percent to 36,400 won, the best weekly gain since February 2004. South Korea said it will invest an extra 14 trillion won ($10.5 billion) into its economy next year to prevent the first recession in a decade, while the central bank reduced its key rate by 25 basis points to 4 percent, the lowest since 2006.

QBE Insurance Group Ltd., Australia's largest property and casualty insurer, advanced 9.4 percent to A$27.90. ICICI Bank Ltd., India's second largest, advanced 29 percent to 398.75 rupiah.

Australia lowered its overnight cash rate target to 5.25 percent from 6 percent. The Reserve Bank of India on Nov. 1 pushed its repurchase rate down for the second time in two weeks.

Nintendo, which gets the biggest portion of its revenue from America, rose 7 percent to 32,750 yen in Osaka. Obama defeated Republican John McCain as voters chose him to lead what may be the broadest overhaul of the U.S. economy since Franklin D. Roosevelt's New Deal. Obama has proposed a $175 billion package that includes checks for consumers, a tax credit for job creation and spending on public works.

Obama ``will attempt to change the way the U.S. does business and how it conducts itself with the rest of the world,'' said Raymond Tang, who oversees $5.8 billion as chief investment officer at CIMB-Principal Asset Management Bhd. in Malaysia. ``It's a whole new world and a new fantastic point of view.''

News Corp., Sanyo

Toyota, Japan's largest automaker, dropped 7.2 percent to 3,460 yen. The company cut its forecast for net income by 56 percent after higher fuel costs and a credit crunch pushed industrywide October U.S. sales to the lowest level since 1983 on an annualized basis.

News Corp., the media company controlled by Rupert Murdoch, slumped 18 percent to A$12.20 in Sydney, the biggest weekly loss since December 1990. The company said 2009 profit will drop because of shrinking ad sales, compared with a previous projection for an increase.

Sanyo Electric Co., the world's biggest maker of rechargeable batteries, surged a record 40 percent to 203 yen in Tokyo. Panasonic Corp., the world's largest consumer-electronics maker, said it gained Sanyo's endorsement to take control of the company.

To contact the reporter for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.net; Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net.