Asian Stocks Advance as U.S. Automakers Move Close to Bailout

oBy Patrick Rial and Masaki Kondo

Dec. 15 (Bloomberg) -- Asian stocks rose on speculation U.S. automakers will be rescued by the Bush administration, preventing bankruptcies that threatened to deepen the global recession.

Toyota Motor Corp. advanced 3.4 percent in Tokyo and Posco, Asia’s third-largest steelmaker, jumped 4.3 percent in Seoul. Hanjin Shipping Co. gained 11 percent after rates for carrying commodities had their biggest daily gain on record.

“Though the economy won’t recover for some time, optimism about policy responses will shore up the stock market,” Tomochika Kitaoka, a Tokyo-based strategist at Mizuho Securities Co., said in an interview with Bloomberg Television. “Investors’ appetite for risk will likely recover today after falling sharply on Friday.”

The MSCI Asia Pacific Index climbed 3.1 percent to 86.95 as of 9:57 a.m. in Tokyo. About fifty stocks gained for each that declined, and all industry groups advanced, led by material producers.

Japan’s Nikkei 225 Stock Average added 4.1 percent to 8,574.92, even as sentiment among Japan’s largest manufacturers fell the most in 34 years. South Korea’s Kospi index rose 4.3 percent.

The Standard & Poor’s 500 Index gained 0.7 percent, reversing a 2.6 percent drop, on Dec. 12 after the White House said it would consider using its $700 billion bank bailout fund to help General Motors Corp. and Chrysler LLC following the Senate’s rejection of an aid package. The failure of the bill’s passage sparked a 4.2 percent plunge on MSCI’s Asian index on Dec. 12 and sent the yen to a 13-year high against the dollar.

The Treasury also said it will work to prevent a failure of the automakers, while GM Chief Executive Officer Rick Wagoner spoke with White House Chief of Staff Joshua Bolten and Treasury Secretary Henry Paulson about a short-term plan to keep the automaker solvent, a person familiar with the talks said.

The MXAP Asia benchmark has rebounded 18 percent since falling to a five-year low on Oct. 27 amid confidence government measures to revive flagging growth will work. Shares trade at 12 times estimated earnings, a third cheaper than at the start of 2008.

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