Asian Stocks Rise, Led by Banks, on Measures to Unlock Credit

By Shani Raja

Jan. 29 (Bloomberg) -- Asia stocks rallied a third day, led by banks and metals producers, on speculation lower interest rates and U.S. stimulus measures will ease the global financial crisis and boost the region’s exports.

Commonwealth Bank of Australia, the nation’s largest mortgage lender, rose 2.4 percent in Sydney as the U.S. Federal Reserve planned to buy longer-term Treasury bonds and New Zealand’s central bank cut its benchmark rate to a record. Sony Corp. rose 3.8 percent after the yen fell against the dollar. BHP Billiton Ltd., the world’s biggest mining company, jumped 4.8 percent as oil and metals prices rose.

“Banking is all about confidence,” said Hugh Dive, who helps manage about $3 billion at Sydney-based Investors Mutual Ltd. “There’s more confidence that the world hasn’t ended, and that under the new U.S. government the mess may get sorted out. It will still take a while for it all to flow through.”

The MSCI Asia Pacific Index added 0.7 percent to 84.09 as of 9:52 a.m. in Tokyo, with three stocks advancing for each one that declined. The Nikkei 225 Stock Average gained 1.9 percent to 8,257.27, while Australia’s S&P/ASX 200 Index rose 0.6 percent. The NZX 50 Index added 1.4 percent in Wellington as New Zealand cut the benchmark interest rate by 1.5 percentage points to 3.5 percent to steer the economy out of a deepening recession.

The Standard & Poor’s 500 Index climbed 3.4 percent after a White House official said President Barack Obama’s team may announce its plan next week to set up a so-called bad bank to buy toxic financial assets.

Stimulus Advances

After the market closed in New York, the U.S. House passed Obama’s $819 billion stimulus package, aimed at lifting the economy out of recession through tax cuts and more than a half- trillion dollars in new spending.

The MSCI Asia Pacific Index tumbled by a record 43 percent last year as the world’s biggest economies slipped into recession, and has lost another 6.2 percent in 2009.

The Fed is ready to buy longer-term Treasury securities if it’s effective in improving credit markets, the Federal Open Market Committee said yesterday after meeting in Washington. The Fed left its benchmark interest rate as low as zero. New Zealand’s central bank said there’s room for further reductions.

Commonwealth Bank, with almost 15 percent of its sales from New Zealand, gained 2.4 percent to A$26.94. Mizuho Financial Group jumped 6.4 percent to 248 yen. Sumitomo Mitsui Financial Group Inc. soared 10 percent to 3,710 yen, even after third- quarter profit almost evaporated on bad-loan costs.

Weaker Yen

The Fed’s announcement helped the dollar strengthen to as much as 90.75 yen in New York from 89.22 at the 3 p.m. close of stock trading in Tokyo yesterday. A weaker yen raises the value of repatriated overseas sales for Japanese companies, boosting shares in Sony, the world’s second-largest consumer-electronics maker, by 3.8 percent to 1,906 yen.

BHP rallied 4.8 percent to A$31.27. Korea Zinc Co., the world’s second-biggest zinc refiner, gained 4.4 percent to 91,800 won after Daewoo Securities Co. raised its recommendation on the stock to “buy” from “trading buy,” citing signs non- ferrous metals prices are bottoming out. Hyundai Steel Co., South Korea’s second-largest steelmaker, advanced 5.1 percent to 37,000 won.

Crude oil for March delivery rose 1.4 percent in New York yesterday, the first advance in three days. A gauge of six metals traded in London gained 1.1 percent.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.