Asian Stocks Rise in Biggest Weekly Rally Since 1998; BHP Rises

By Hanny Wan and Masaki Kondo

March 27 (Bloomberg) -- Asian stocks climbed in the regional benchmark index’s biggest weekly rally since 1998, as higher commodity prices and better-than-estimated earnings at U.S. companies boosted optimism the global recession is abating.

BHP Billiton Ltd., the world’s No. 1 mining company, climbed 1.4 percent in Sydney after prices for oil and metals advanced. Canon Inc., the world’s biggest camera maker, gained 4.2 percent in Tokyo as U.S. electronics retailer Best Buy Co. reported profit that topped analysts’ estimates. Mizuho Financial Group Inc., Japan’s No. 2 listed bank, added 1.3 percent on plans to reduce shareholdings.

“U.S. consumer spending appears to be picking up,” Mitsushige Akino, who oversees the equivalent of $615 million at Tokyo-based Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television. “The market will remain resilient, though technical indicators indicate it is overheating.”

The MSCI Asia Pacific Index rose 1.3 percent to 86.58 as of 9:54 a.m. in Tokyo. The gauge jumped 8.9 percent this week, its best weekly performance since the week ended Oct. 9, 1998. The gauge advanced 23 percent from a five-year low on March 9, technically entering a bull market, amid optimism central banks and governments are succeeding in their efforts to revive economic growth.

Japan’s Nikkei 225 Stock Average gained 0.8 percent, while Australia’s S&P/ASX 200 Index advanced 1.2 percent. All markets advanced except New Zealand.

Higher Valuations

Futures on the Standard & Poor’s 500 Index were little changed. The gauge climbed 2.3 percent yesterday, after Best Buy, the largest U.S. electronics retailer, reported fourth-quarter earnings that were 15 percent higher than analysts had anticipated. ConAgra Foods Inc., the maker of Banquet frozen dinners, also beat analyst estimates as material costs fell.

Canon advanced 4.2 percent to 3,090 yen. Sony Corp., the world’s second-largest consumer-electronics maker, rose 2.9 percent to 2,280 yen.

Gains in stocks raised the average valuation of companies on the MSCI Asia Pacific Index yesterday to 16.9 times profit, the highest level since December 2007, data compiled by Bloomberg show. The gains pared the index’s drop this year to 3.7 percent, while the MSCI World Index lost 8.4 percent. Both are set for their sixth-straight quarterly declines.

BHP climbed 1.4 percent to A$34.25. Rio Tinto Group, the world’s third-largest mining company, added 6.1 percent to A$58.05.

Crude oil added 3 percent to $54.34 a barrel in New York yesterday, the highest settlement since Nov. 28. A measure of six primary metals traded in London rose 2.6 percent, the first gain in three days.

Mizuho climbed 1.3 percent to 233 yen. The company is aiming to reduce its 2.9 trillion-yen ($29.5 billion) stockholdings to 2 trillion yen, Takashi Tsukamoto, who will become Mizuho’s chief executive officer on April 1, said in an interview. Losses on equity investments brought about two straight quarterly deficits at Mizuho, forcing the bank to raise $4.4 billion to shore up capital.

To contact the reporters for this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.