Asian Stocks Rise, Led by BHP, Komatsu, on China Stimulus Plan

By Masaki Kondo

March 5 (Bloomberg) -- Asian stocks gained for a second day, led by commodity and financial companies, on speculation an expanded economic stimulus plan in China will spur demand for raw materials and machinery.

BHP Billiton Ltd., the world’s biggest mining company, soared 6.3 percent in Sydney after copper jumped to a three month high in New York and the Reuters/Jefferies CRB Index of 19 commodities had its biggest rally this year. Mizuho Financial Group Inc., Japan’s second-biggest listed bank, jumped 4.4 percent after setting the terms for the delayed merger of its two brokerage affiliates.

“People are keen to see how much more money China will pump into its economy,” Mitsushige Akino, who oversees about $615 million at Tokyo-based Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television. “If the country doubles its planned spending, the impact will be huge.”

The MSCI Asia Pacific Index gained 0.9 percent to 72.93 as of 9:09 a.m. in Tokyo. Three stocks rose for each one that fell. The gauge has slumped 49 percent in the past year as the financial crisis dragged the world’s largest economies into recession.

Japan’s Nikkei 225 Stock Average climbed 1.1 percent, while Australia’s S&P/ASX 200 Index rose 1.3 percent. All markets open for trading in the region advanced.

China will “significantly increase” investment in 2009 to counter a slowdown in the world’s third-biggest economy, Premier Wen Jiabao said in a work report presented to the National People’s Congress in Beijing today.

Reversal

The MSCI Asia Pacific yesterday reversed a 1.6 percent decline to end the day 0.7 percent higher after a former Chinese statistics bureau head told reporters the premier would announce a new economic package on top of a 4 trillion-yuan ($585 billion) spending plan. China’s parliament convenes its annual meeting today, and Wen will give his annual address to the nation’s legislature.

Futures on the Standard & Poor’s 500 Index added 0.2 percent. The U.S. gauge climbed 2.4 percent in New York yesterday, breaking a five-day losing streak, while Europe’s Dow Jones Stoxx 600 Index leapt 3.9 percent, the most since Dec. 8.

Governments from the U.S. to China and Australia have sought to introduce policies this year to ease the financial crisis and bolster their economies. India’s central bank yesterday cut its key interest rate to a record low.

Commodities Surge

Speculation China’s economy will pick up steam drove up commodity prices. Crude oil for April delivery surged 9 percent to $45.38, the highest settlement since Jan. 26. Copper futures for May delivery leapt 5.6 percent.

BHP Billiton jumped A$1.71 to A$28.82. Rio Tinto Group, the world’s third-largest miner, surged 5.3 percent to A$45.79. Komatsu Ltd., the world’s second-biggest maker of earthmoving equipment, climbed 5.7 percent in Tokyo to 1,095 yen.

Mizuho rose 8 yen to 188 after saying yesterday it will hold 58 percent of the company to be created through the merger of Mizuho Securities Co. and Shinko Securities Co. Shinko surged 6.9 percent.

Canon Inc., which gets a third of its sales from the Americas, added 1.1 percent to 2,330 yen after the yen depreciated against the dollar to as much as 99.49 yesterday, the weakest level since Nov. 5, from 98.44 at the 3 p.m. close of stock trading in Tokyo.

The company’s operating profit rises by 9.1 billion yen ($92 million) for every 1 yen decline, according to its earnings report on Jan. 28.

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