Asian Stocks Rise on U.S. Mortgage Aid, Higher Retail Sales

By Jonathan Burgos and Patrick Rial

Feb. 13 (Bloomberg) -- Asian stocks rose, led by banks and consumer companies, on speculation the U.S. will provide relief for homeowners and after retail sales in the world’s biggest economy unexpectedly increased.

Australia & New Zealand Banking Group Ltd., Australia’s third largest, jumped 7.1 percent in Sydney as the country’s senate passed a $28 billion stimulus package. Hitachi Ltd. added 3.1 percent as the company and its partners were named the preferred group to win a U.K. train contract. Rio Tinto Ltd., the world’s No. 3 mining company, fell 3.9 percent on concern the sale of assets to Aluminum Corp. of China will hurt profits.

“Reports that the U.S. is coming out with a support package for the housing market demonstrates the government’s drive to bring about an economic recovery,” said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. “The market is headed for a rebound if policies are effective.”

The MSCI Asia Pacific Index advanced 0.8 percent to 81.82 at 11:07 a.m. in Tokyo, snapping a four-day, 2.7 percent drop. The gauge has lost 8.9 percent this year, extending 2008’s record 43 percent, as the credit crisis dragged the world’s biggest economies into recession.

The Nikkei 225 Stock Average rose 1.5 percent to 7,818.96 at in Tokyo. Australia’s S&P/ASX 200 Index rose 0.8 percent. All benchmark indexes in the region advanced except South Korea’s.

Futures on the Standard & Poor’s 500 Index fell 0.3 percent. The index staged a late rally in New York yesterday, erasing a 3.1 percent loss to gain 0.2 percent as news of the housing plan emerged.

Mortgage Aid

The Obama administration’s housing plan will use government money to help reduce interest rates for struggling borrowers, while asking lawmakers to approve more ways to modify mortgages, according to a person briefed on the proposal. U.S. Treasury Secretary Timothy Geithner intends to announce the plan in coming days, the person said.

“The outlook for a dose of relief for U.S. homeowners helped markets there stage a rebound, while economic data was fairly positive as well,” Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages $53 billion, said in an interview with Bloomberg Television. “The market here has been beaten down recently and is due for a bounce.”

Governments around the world are stepping up efforts to revive global growth that the International Monetary Fund predicted two weeks ago will grind almost to a halt this year. The number of Americans collecting jobless benefits reached the highest on record, though sales at U.S. retailers unexpectedly climbed in January, halting a six-month slide, government reports showed yesterday.

Stimulus Package

Australia & New Zealand Banking Group jumped 7.1 percent to A$12.73 in Sydney. Macquarie Group Ltd., Australia’s largest investment bank, added 3 percent to A$24.10.

The country’s Senate approved in a second vote a A$42 billion ($28 billion) stimulus package aimed at ensuring the economy doesn’t enter its first recession in 18 years.

Hitachi, which plans to build a manufacturing site in the U.K., rose 3.1 percent to 268 yen in Tokyo. The U.K. Department for Transport today named Agility Trains, a group that includes Hitachi, as the preferred bidder for a 7.5 billion-pound ($10.7 billion) contract to build and maintain a fleet of Super Express trains, replacing existing stock.

Pioneer Corp. tumbled 20 percent to 142 yen in Tokyo. The company said yesterday it will fire 10,000 workers and close its television operations as losses this year are expected to climb to 130 billion yen ($1.44 billion).

‘Don’t Like This Deal’

More than 100,000 job cuts have been announced by listed Japanese companies in the past six months as the global recession has pummeled Japan’s capital goods and export-oriented manufacturers.

Rio Tinto fell 3.9 percent to A$49.98. The stock also fell in London trading yesterday after Aluminum Corp., known as Chinalco, agreed to invest $19.5 billion by buying convertible bonds and stakes in projects in China, the U.S. and Australia.

“We don’t like this deal and don’t think it is the best option,” analysts at Goldman Sachs JBWere Pty Ltd. wrote in a report dated yesterday. “We think Rio is at a strategic and marketing disadvantage versus its peers going forward.”

To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Patrick Rial in Tokyo at prial@bloomberg.net.