Asian Stocks Jump as Commodity Prices Rally, Citigroup Rescued

By Patrick Rial and Masaki Kondo

Nov. 25 (Bloomberg) -- Asian shares rose as a rally in raw materials lifted commodities producers and a U.S. government rescue of Citigroup Inc. shored up confidence in the world’s biggest economy.

BHP Billiton Ltd., the world’s biggest mining company, soared 12 percent in Sydney, the most since 1987, after oil and copper jumped more than 5 percent. Posco, Asia’s third-largest steelmaker, jumped 9.4 percent in Seoul. Resona Holdings Inc., Japan’s No. 4 listed bank, climbed 7 percent as Japan’s market resumed trading following a holiday yesterday.

“Investors are pleased with the Citigroup rescue and the subsequent rally in U.S. shares,” Mamoru Shimode, chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television.

The MSCI Asia Pacific Index added 2 percent to 78.42 as of 9:20 a.m. in Tokyo. More than 20 shares climbed for each that retreated on the gauge as all 10 industry groups posted gains.

Japan’s Nikkei 225 Stock Average rose 4.7 percent to 8,281.36. Panasonic Corp. led gains after the Yomiuri newspaper said the company may buy a majority stake in Sanyo Electric Co. at less than the stock’s current price.

South Korean and Australian indexes rose more than 5 percent.

About half of stocks in Asia trade at below their book value as almost $1 trillion in credit losses and writedowns battered financial firms and dragged the global economy into recession.

U.S. Rally

U.S. stocks surged yesterday, with the Standard & Poor’s 500 Index rising 6.5 percent. That capped its biggest two-day rally since 1987, after the U.S. government decided to protect Citigroup from losses on troubled mortgages.

Citigroup received a government support package which injects $20 billion of capital and shields the bank from losses on $306 billion of mortgages, commercial loans and other securities. The bank’s stock soared 58 percent yesterday, rebounding from last week’s 60 percent plunge.

Crude oil for January delivery climbed 9.2 percent to $54.50 a barrel in New York yesterday, the biggest one-day jump since Nov. 4 as the Citigroup rescue plan bolstered confidence banks will loosen lending and demand for raw materials will increase. Copper futures for March delivery rose 5.9 percent.

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