Asian Stocks Rise on Optimism Stimulus Plans Will Revive Growth

By Jonathan Burgos

March 16 (Bloomberg) -- Asian stocks rose, led by financial companies and automakers, on heightened optimism government stimulus measures will help revive global economic growth.

Mitsubishi UFJ Financial Group Ltd., Japan’s biggest publicly traded bank, rose 6 percent as the Nikkei newspaper said the country’s central bank may buy subordinated loans to shore up capital. Mazda Motor Corp., Japan’s No. 4 carmaker, jumped 7.7 percent after saying it expects to break even in the next business year. Woodside Petroleum Ltd. fell 3.2 percent in Sydney on a drop in crude oil.

“The prevailing mood among investors toward stimulus measures has been negative, but now we are seeing some effects start to break through,” Tomochika Kitaoka, a strategist at Tokyo-based Mizuho Securities Co., said in an interview with Bloomberg Television. “We’re now in a situation where it’s possible to see sentiment make an about-face.”

The MSCI Asia Pacific Index rose 1.5 percent to 75.80 as of 10:37 a.m. in Tokyo, with five stocks gaining for every two that declined. Japan’s Nikkei 225 Stock Average climbed 2 percent to 7,723.64, while South Korea’s Kospi index rose 0.9 percent. Most markets in Asia fell except China, Singapore and the Philippines.

Futures on the Standard & Poor’s 500 Index fell 0.5 percent. The gauge added 0.8 percent on March 13, capping an 11 percent rally for the week. Group of 20 finance ministers meeting at the weekend pledged to combat the global recession and restore the financial system to health.

‘Key Priority’

The MSCI Asia Pacific Index jumped 3.9 percent last week, its best performance this year. The gauge is still down 17 percent in 2009, extending last year’s record 43 percent drop as the global recession decimated profits at companies from Mazda to Canon Inc., the world’s biggest maker of digital cameras.

Estimated earnings for companies included in the benchmark are down 66 percent from a year ago, according to data compiled by Bloomberg. Companies on the index trade at an average of 1.1 times book value, near its October record low of 1 time book.

The financial crisis prompted governments from the U.S. to China and Japan to widen measures to stimulate growth. Federal Reserve Chairman Ben S. Bernanke said in an interview broadcast by CBS Corp. yesterday that the risk of depression has been “averted.” The “key priority” now is to restore lending, a G- 20 statement on March 14 said.

The Bank of Japan is considering buying subordinated debt from banks, the Nikkei reported today. The purchases may help the banks offset losses caused by writedowns on shareholdings and bolster their capital, the report said.

Oil Tumbles

Mitsubishi UFJ jumped 6 percent to 444 yen in Tokyo. Mizuho Financial Group Inc., Japan’s second-largest bank, added 5.6 percent to 189 yen.

Mazda, partly owned by Ford Motor Co., climbed 7.7 percent to 154 yen. The company said on March 13 it aims to cut fixed costs by at least 10 percent next fiscal year as it seeks recover from its projected loss this year and achieve a cash flow “break even” next year.

Woodside Petroleum, Australia’s second-largest oil producer, fell 3.2 percent to A$36.58 in Sydney. Inpex Corp., Japan’s largest oil explorer, slipped 2.8 percent to 656,000 yen in Tokyo. The Organization of Petroleum Exporting Countries left its production quotas unchanged at a weekend meeting. Oil prices tumbled as much as 5.2 percent to $43.85 per barrel in trading today.

To contact the reporter for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.