By Jonathan Burgos
April 16 (Bloomberg) -- Asian stocks climbed, as the regional benchmark index resumed a five-week rally, on growing optimism stimulus efforts and interest-rate cuts are easing the global recession.
JFE Holdings Inc., Japan’s No. 2 steelmaker, gained 3.1 percent on speculation the nation’s steel mills may secure lower iron-ore prices and as a Federal Reserve survey signaled that the U.S. slowdown is moderating. Jiangxi Copper Co. Ltd., China’s biggest producer of the metal, jumped 2.1 percent as copper prices headed for their longest winning streak in three years. Tenaga Nasional Bhd., Malaysia’s largest electricity provider, added 5.4 percent on higher-than-estimated profit.
“We’re probably seeing a bottoming out in the economy,” said Arjuna Mahendran, Asia chief investment strategist in Singapore HSBC Private Bank, which oversees $494 billion in assets. “The second quarter will be good for stocks as corporate earnings should bounce.”
The MSCI Asia Pacific Index advanced 0.6 percent to 89.54 at 3:53 p.m. in Tokyo, almost erasing its losses for 2009. The gauge rallied 27 percent from a five-year low reached on March 9. It pared a 2.2 percent gain after government data showed the Chinese economy grew at the slowest pace in almost 10 years.
China’s Shanghai Composite index gained 0.2 percent after earlier falling 1.5 percent. Japan’s Nikkei 225 Stock Average gained 0.1 percent to 8,755.26, while South Korea’s Kospi index added 0.3 percent.
Optimistic Investors
Thailand’s SET Index fell 0.1 percent after resuming trade following a three-day public holiday. The Thai government called a state of emergency this week following clashes between security forces and protesters.
Australand Property Group, a unit of Singapore’s CapitaLand Ltd., jumped 7.6 percent in Sydney after it got approvals from banks to refinance debt. Santen Pharmaceutical Co., a Japanese maker of ophthalmic drugs, surged 11 percent after licensing sales rights for its glaucoma medication to Merck & Co.
Futures on the Standard & Poor’s 500 Index lost 0.2 percent. The gauge rose 1.3 percent in New York yesterday after credit card provider American Express Co. said bad loans increased at a slower pace in March.
Global stocks rallied from the lowest levels in more than a decade on speculation government stimulus worldwide will end the global recession. Investors in 10 countries grew less concerned that stocks will keep falling, Bloomberg’s Professional Global Confidence Survey showed. It was the first unanimous improvement in the gauge since it began 17 months ago.
‘Scattered Pickup’
The Federal Reserve cut interest rates seven times last year, while the U.S. government has pledged as much as $12.8 trillion in spending. China announced a 4 trillion yuan ($585 billion) stimulus package in November and cut interest rates five times between September and December.
JFE climbed 3.1 percent to 2,700 yen. Nippon Steel Corp., Japan’s largest steelmaker, added 1.3 percent to 313 yen in Tokyo. The country’s steel mills and their suppliers may agree to a cut in iron ore prices of about 30 percent, according to the Sankei newspaper.
The Fed’s Beige Book survey said five of 12 Fed district banks “noted a moderation in the pace of decline.” Retail sales showed a “slight improvement” in some regions, and there was a “scattered pickup” in home buying, the survey said.
“The Beige Book gave some indication that the deterioration of the U.S. economy is easing and shows that there is some positive macroeconomic news starting to emerge,” Juichi Wako, a strategist at Tokyo-based Nomura Securities Co., said in an interview with Bloomberg Television.
Singapore Banks
The five-week rally in the MSCI Asia Pacific Index has driven the average valuation of companies on the gauge to 18 times reported earnings, the highest since November 2007.
Jiangxi Copper added 2.1 percent to HK$10.60. Rio Tinto Group, the world’s third-largest mining company, gained 1.2 percent to A$58.05. Copper rose 1.1 percent in London, the sixth day of gains, on speculation falling global inventories signal rising demand. Copper prices have surged 59 percent this year.
Tenaga climbed 5.4 percent to 6.85 ringgit in Kuala Lumpur as Credit Suisse Group upgraded the stock to “outperform” from “underperform” following the company’s profit report.
Australand surged 7.6 percent to 35.5 Australian cents. The A$350 million ($254 million) of refinancing, approved by three Australian banks, will be enough to repay commercial mortgage- backed securities maturing in June, Australand said.
Santen jumped 11 percent to 2,910 yen in Tokyo. Merck obtained a license to market Santen’s glaucoma drug tafluprost in the Americas, Africa and Western Europe.
DBS Group Holdings Ltd., Southeast Asia’s biggest bank, gained 1.6 percent to S$9.30. United Overseas Bank Ltd. Singapore’s second-biggest bank, rose 1.6 percent to S$11.22.
CIMB Research upgraded its rating on the Singapore banks to “overweight” from “underweight,” saying they “will come out of the crisis much stronger than before.”
To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.
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