Asian Stocks Gain on Central Bank Actions, Oil Price Decline

By Chua Kong Ho

Dec. 3 (Bloomberg) -- Asian stocks rose for the first time in three days as central banks took steps to contain the global recession and oil reached a three-month low yesterday.

Qantas Airways Ltd., Australia’s biggest airline, climbed 7.1 percent after confirming merger talks with British Airways Plc. Tokyo Electric Power Co. gained 2.6 percent on optimism fuel costs will drop as oil fell to more than $100 below July’s record. Rio Tinto Group, the world’s second-largest iron ore producer, sank 5.1 percent after saying its spending review may affect some projects.

The MSCI Asia Pacific Index gained 0.8 percent to 79.55 as of 9:16 a.m. in Tokyo. The measure dropped 4.5 percent yesterday, the worst slump since Nov. 20. About seven stocks climbed for each that declined today. The gauge has lost 49 percent this year, and trades at an average of 1.06 times book value, compared with as high as 2.6 times last year.

Japan’s Nikkei 225 Stock Average rallied 1.1 percent to 7,950.43, as the Bank of Japan said it will accept lower-grade corporate debt as collateral for loans. Fast Retailing Co., the country’s biggest clothing retailer, was set to gain after November sales jumped. South Korea’s Kospi Index added 0.5 percent.

In New York, the Standard & Poor’s 500 Index rallied in the final hour to close 4 percent higher, rebounding from its worst plunge since October.

The collapse of the American mortgage market sparked a financial crisis that pushed the U.S., Europe and Japan into the first simultaneous recession in the postwar era. The Federal Reserve yesterday extended the terms of emergency-financing programs, aligning their expiration dates with other central bank efforts to mitigate the credit crisis.

That followed an interest rate cut during stock-trading hours yesterday by Australia’s central bank and a pledge by the Bank of Japan that it would accept lower-grade corporate debt as collateral for loans. Vietnam’s central bank cut interest rates for the fourth time in six weeks yesterday.

To contact the reporter responsible for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net