Asia Stocks Rise on Falling U.S. Jobless Claims, Auto Upgrades

By Patrick Rial and Masaki Kondo

April 10 (Bloomberg) -- Asian stocks rose to a three-month high after a drop in U.S. jobless claims boosted confidence the global recession is easing and brokerages upgraded carmakers.

Samsung Electronics Co., Asia’s biggest maker of chips, flat screens and mobile phones, rose 4 percent. Isuzu Motors Ltd. jumped 12 percent after Morgan Stanley upgraded the truckmaker and Nomura Holdings Inc. raised its stance on Japan’s auto sector. Sumitomo Mitsui sank 14 percent after posting its biggest loss in six years. Benchmarks reversed losses in the afternoon after the Wall Street Journal said Goldman Sachs Group Inc. will sell shares to repay a government loan.

The MSCI Asia Pacific Index followed global stocks into a fifth-straight weekly gain, adding 0.5 percent to 87.91 as of 6:20 p.m. in Tokyo, the highest since Jan. 12. More than two shares rose for each that retreated on the benchmark.

“The market has started to reflect a possible recovery as there are signs the global economy is bottoming out,” said Masaru Hamasaki, a senior strategist at Toyota Asset Management Co., which oversees about $3.3 billion. “Banks are still suffering from losses on their stockholdings and selling new shares to bolster their capital emphasizes the negative aspect of having to raise more money.”

MSCI’s Asian gauge is set for a 1.4 percent increase in the past five days, a fifth weekly gain that’s the longest winning streak since February 2007. The MSCI World index has risen 0.7 percent this week.

Expanded Stimulus

Japan’s Nikkei 225 Stock Average swung between gains and losses before closing 0.5 percent higher. South Korea’s Kospi index advanced 1.5 percent, China’s Shanghai Composite Index jumped 2.7 percent to an eight-month high, while the Vietnam Stock Index posted the region’s largest advance of 4.3 percent. Markets in Australia, New Zealand, Singapore and Hong Kong are closed today for holidays.

Jiangxi Copper Co., China’s biggest producer of the metal, rallied 10 percent after prices for the metal rose to the highest in five months. Cathay Financial Holding Co. climbed 4.6 percent after Taiwan’s biggest listed financial-services company swung to a net profit in the first quarter.

MSCI’s Asian gauge has rallied 25 percent from a five-year low on March 9 as governments and central banks expanded measures to alleviate the global recession. Japanese Prime Minister Taro Aso is expected to unveil today a $154 billion spending plan to revive growth, his third stimulus plan since taking office last September. The Bank of Korea kept its benchmark rate unchanged yesterday saying there are signs the economy’s deepest contraction in more than a decade may be abating.

Jobless Claims

U.S. first-time claims for unemployment insurance fell by 20,000 to 654,000 in the week to April 4, the Labor Department reported yesterday. That was lower than the 660,000 level economists had estimated.

Samsung Electronics rose 4 percent to 603,000 won. Sony, the world’s No. 2 electronics maker, added 4.2 percent to 2,585 yen. AU Optronics Corp., the world’s third-biggest maker of liquid-crystal displays, jumped 6.6 percent to NT$32.40. The flat-panel display industry may have entered a strong recovery as prices are climbing in April, the Commercial Times said today, citing industry researcher DisplaySearch.

LG Display Co. rose 2.6 percent to 32,100 won after the Seoul Economic Daily said the world’s second-largest maker of LCDs is in talks to sell panels to Sony Corp.

Isuzu rallied 12 percent to 155 yen, the highest since Nov. 11. Noriaki Hirakata at Morgan Stanley lifted the stock to “overweight” from “equal-weight,” citing better-than- expected sales in markets such as China and Indonesia.

U.S. Market

Nissan Motor Co., Japan’s No. 3 automaker, gained 4.9 percent to 511 yen, while Fuji Heavy Industries Ltd., the maker of Subaru cars, rose 5.5 percent to 405 yen after Nomura lifted both stocks to “buy.”

The U.S. auto market looks to be bottoming, while government plans to provide subsidies for new cars should also help sales, Nomura’s Shinya Naruse wrote in a report. Naruse lifted Japan’s auto industry to “neutral” from “bearish.”

Japanese banks dropped after Sumitomo Mitsui, the nation’s No. 3 listed lender, posted a loss of 390 billion yen ($3.88 billion) in the year to March 31. Analysts had expected a profit. To shore up capital, the company prepared to sell as much as 800 billion yen of common shares.

The shares plunged 14 percent to 3,110 yen, leading declines on the MSCI World Index. Mizuho Financial Group Inc., Japan’s second-biggest list bank, sank 9.6 percent to 198 yen, the sharpest drop since Oct. 27.

Copper Prices

Goldman Sachs, the investment bank that became a commercial lender last year, is considering selling several billion dollars worth of new shares to pay back a $10 billion government loan, the Wall Street Journal reported. The shares have more than doubled since a low in November. Investors are in favor of the loan repayment, according to the report.

Jiangxi Copper soared 10 percent to 25.72 yuan. Tongling Nonferrous Metals Group Co., China’s second-biggest copper producer, climbed 8.6 percent to 16.06 yuan. Copper futures for May delivery increased 3.6 percent to $2.071 a pound in New York.

Nippon Mining Holdings Inc., Japan’s biggest producer, jumped 7 percent to 446 yen, the highest since Sept. 29. The Tokyo-based smelter probably posted a loss of 42 billion yen for the year ended March, better than the 57 billion-yen loss projected by the company in February, the Nikkei newspaper reported.

Cathay Financial climbed 4.6 percent to NT$35.50. The company swung to a profit of NT$4.98 billion ($147.5 million) in the first quarter after a loss the year earlier.

Haseko Corp. soared 17 percent to 63 yen in Tokyo, leading gains on the MSCI World gauge. Credit Suisse Group AG raised its rating on the Japanese general contractor, citing declining inventory of condominiums and better credit conditions.

To contact the reporters for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.