Asian Commodity Shares Rise on Stimulus Optimism; Sharp Slumps

By Patrick Rial and Masaki Kondo

Nov. 28 (Bloomberg) -- Asian commodity stocks rose on expectations government steps to pull the global economy out of recession will boost demand for raw materials. Sharp Corp. led electronics companies lower after Panasonic Corp. slashed its profit outlook.

BHP Billiton Ltd., the world’s biggest mining company, gained 5.3 percent, while Komatsu Ltd., the world’s second- largest maker of construction machinery, added 1.4 percent, a second day of gains after China lowered interest rates. Sharp, Japan’s largest maker of liquid-crystal displays, fell 2.7 percent after Nomura Holdings Inc. lowered its recommendation on the shares and larger rival Panasonic cut its profit forecast by 90 percent on weakening demand.

The MSCI Asia Pacific Index was unchanged at 81.46 as of 9:17 a.m. in Tokyo. About the same number of shares climbed as retreated on the gauge.

“Investors have shifted their focus from the current economic slump to authorities’ stimulus measures,” Yoshinori Nagano, a Tokyo-based senior strategist at Daiwa Asset Management Co., which manages about $96 billion, said in an interview with Bloomberg Television.

Japan’s Nikkei 225 Stock Average swung between gains and losses, and was recently down 0.1 percent at 8,362.71. Shares in South Korea, Australia and New Zealand advanced. U.S. markets were closed yesterday for the Thanksgiving holiday.

Writedowns

Credit losses and writedowns at financial companies have neared $1 trillion worldwide, spurring central banks and governments to cut rates and spend more to stimulate economies. The People’s Bank of China on Nov. 26 reduced its benchmark lending rate by the most in 11 years, while the European Union proposed a 200 billion euro ($258 billion) spending package, joining Japan, China and the U.S. in crafting economic plans.

Panasonic, the world’s biggest maker of consumer electronics, yesterday lowered its annual net income forecast by 90 percent, saying demand and prices have fallen as the U.S. financial crisis spread across the globe.

Nomura Securities Co. and HSBC Holdings Plc cut their ratings on Panasonic Corp. Nomura also lowered closest rival Sony Corp. to “neutral” from “buy,” and Sharp to “reduce” from “neutral.”

“Panasonic’s forecast cut will weigh on high-tech shares though the slump in this sector has been somewhat priced in,” said Daiwa Asset’s Nagano.

Japan’s jobless rate fell to 3.7 percent last month from 4 percent in September, the statistics bureau said today in Tokyo. The median estimate of 35 economists surveyed by Bloomberg News was for unemployment to rise to 4.2 percent.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.