Asian Stocks Climb as Fed Fuels Growth Optimism; Honda Gains

By Jonathan Burgos and Patrick Rial

April 16 (Bloomberg) -- Asian stocks climbed, lifting the regional benchmark index to the highest in more than three months, as a U.S. Federal Reserve survey stoked optimism that the world’s largest economy is recovering.

Honda Motor Co., which gets 51 percent of sales in North America, gained 2.6 percent as almost half of the regions surveyed in the Fed’s Beige Book said the economic decline is moderating. Hitachi Ltd. rose 3.8 percent after NEC Electronics Corp., Japan’s third-biggest chipmaker, said it’s in talks to merge with Hitachi’s Renesas Technology Corp. affiliate.

The MSCI Asia Pacific Index advanced 2.1 percent 90.83 at 10:30 a.m. in Tokyo, wiping out its losses for 2009. The gauge, which is set to close at the highest level since Jan. 7, has rallied 29 percent from a five-year low reached on March 9.

“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.

Japan’s Nikkei 225 Stock Average jumped 3 percent to 9,007.92, while South Korea’s Kospi index climbed 2.8 percent and Australia’s S&P/ASX 200 Index gained 1.2 percent. All markets open for trading advanced.

Futures on the Standard & Poor’s 500 Index added 0.7 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.

Fed Survey

U.S. stocks accelerated gains after the Fed’s Beige Book said that 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.

Honda rose 2.6 percent to 2,795 yen in Tokyo. Toyota Motor Corp., the world’s largest automaker, added 1.6 percent to 3,860 yen. Japanese carmakers also advanced after Nikkei English News said U.S. inventories for the country’s three largest producers have fallen by about 20 percent in the past month.

The five-week rally in the MSCI Asia Pacific Index has driven the average valuation of companies on the gauge trade to 18 times reported earnings, the highest since November 2007.

Investors in 10 countries grew less concerned that stocks will keep falling, according to Bloomberg’s Professional Global Confidence Survey. It was the first unanimous improvement in the gauge since it began 17 months ago.

Semiconductor Venture

Global stocks rebounded from the lowest levels in more than a decade on speculation government stimulus from the U.S. to Japan will end the global recession. China is scheduled to release data today on gross domestic product for the first quarter, industrial production and retail sales.

Hitachi rose 3.8 percent to 325 yen. Mitsubishi Electric Corp. rose 4.6 percent to 526 yen. Shino Inokuma, a spokeswoman for NEC Electronics, said the company is considering a merger with Renesas, a semiconductor venture between Hitachi and Mitsubishi Electric, to improve competitiveness.

NEC Electronics shares had yet to trade, though were being bid for at 930 yen, 12 percent above yesterday’s close.

Inokuma was responding to a Nikkei newspaper report that NEC Electronics and Renesas seek to reach an agreement this month and merge by April 2010. The merger would create Japan’s biggest chipmaker with annual sales of more than 1.2 trillion yen ($12 billion), Nikkei said.

To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Patrick Rial in Tokyo at prial@bloomberg.net.