By Shani Raja
Oct. 9 (Bloomberg) -- Most Asian stocks rose, with the MSCI Asia Pacific Index set for its biggest weekly gain in a month, as investors favored companies linked to the global economic recovery over haven assets including utilities shares.
Samsung Electronics Co., the world’s No. 1 memory-chip maker, climbed 4 percent after chip prices rose to a 16-month high. Record gold prices drove Zijin Mining Gold Co. up by 10 percent in Shanghai, where markets traded after an eight-day holiday. Electric Power Development Co. sank 2.4 percent in Tokyo, leading declines by utilities. Treasuries fell after Federal Reserve Chairman Ben S. Bernanke said the bank is ready to tighten monetary policy once the economy improves.
The MSCI Asia Pacific Index rose 0.3 percent to 118.85 at 1:13 p.m. in Tokyo, having swung between gains and losses at least 16 times. Five stocks advanced for every three that declined. The index has climbed 3.5 percent this week as a report showed U.S. service industries expanded and signs of growth prompted Australia to raise interest rates.
“We’re all hoping the global recession is winding to a close,” said Rob Patterson, who helps manage $3.4 billion at Argo Investments Ltd. in Adelaide, Australia. “Certainly, the economic indicators are getting less worse. But I don’t imagine the U.S. will be raising rates any time soon.”
China’s Shanghai Composite Index climbed 3.8 percent, leading gains in Asia, while Taiwan’s Taiex Index added 0.67 percent. South Korea’s Kospi Index rose 1.7 percent.
Nintendo, Promise
Japan’s Nikkei 225 Stock Average added 1.5 percent, led by Nintendo Co., which gained 6.4 percent on a Citigroup Inc. upgrade. Promise Co., a Japanese consumer lender, surged 11 percent on speculation an executive’s promotion will strengthen ties with the company’s largest shareholder. Casino company Wynn Macau Ltd. climbed 9.1 percent in its Hong Kong debut.
Futures on the Standard & Poor’s 500 Index lost 0.2 percent. The gauge increased 0.8 percent yesterday, its fourth-straight gain, as first-time jobless claims fell more than economists estimated last week and an industry report showed U.S. retail sales rose for the first time in 13 months.
A gauge of technology stocks in the MSCI Asia Pacific Index climbed 0.7 percent, the most of 10 industry groups. The price of the benchmark dynamic random access memory chip gained 2.4 percent yesterday to the highest since June 17, 2008, according to Dramexchange Technology Inc., operator of Asia’s biggest spot market for semiconductors.
Samsung added 4 percent to 749,000 won, while Hynix Semiconductor Inc., the world’s second-largest computer-memory maker, climbed 2.1 percent to 19,700 won.
Chinese Gold Producers
Zijin Mining, China’s largest gold producer, surged 10 percent to 9.34 yuan, while Shandong Gold Mining Co. climbed 10 percent to 64.90 yuan after gold futures in New York reached a record $1,062.70 an ounce yesterday. Bullion lost 0.8 percent in after-hours trading today.
Newcrest Mining Ltd., Australia’s largest gold producer, gained 1.3 percent to A$35.62. Mitsubishi Corp., which generates more than half of its profit from commodities dealing, rose 0.7 percent to 1,902 yen.
A measure of six metals traded on the London Metal Exchange, including copper and zinc, added 4.2 percent yesterday, the steepest gain since Aug. 3, and oil surged 3.1 percent to $71.69 a barrel in New York.
“I’m still bullish because we are in a market with excess liquidity,” said Hiromichi Tsuyukubo, a hedge-fund manager at Myojo Asset Management Japan Co. in Tokyo. “That money is going to continue flowing to the materials sector.”
‘Pretty Good Rally’
The MSCI Asia Pacific Index has climbed 68 percent from a five-year low on March 9 on speculation the global economy’s recovery from its worst slowdown since World War II will bolster corporate earnings. Shares on the gauge traded at 1.55 times book value, up from 1.03 times at the market’s low in March, according to data compiled by Bloomberg.
“We’ve had a pretty good rally and it’s got to stop somewhere,” said Argo’s Patterson. “Companies will shortly be giving some indication of how they’re traveling. Much will depend how bullish or otherwise they are.”
The yield on the benchmark 10-year Treasury note rose two basis points, or 0.02 percentage point, to 3.27 percent, according to data compiled by Bloomberg. The Fed will be ready to raise interest rates when the economic outlook “has improved sufficiently,” Bernanke said at a conference yesterday on monetary economics in Washington.
“The U.S. economy and corporate-earnings picture both continue to show improvement,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “Risk appetite among investors is returning.”
Worst Performers
Utilities and telephone companies, whose earnings are typically regarded as being sheltered from swings in the economic cycle, are the MSCI Asia Pacific Index’s worst performers during the gauge’s seven-month rally.
Electric Power Development sank 2.4 percent to 2,700 yen and Chugoku Electric Power Co. dropped 2 percent to 1,881 yen.
Nintendo, which makes the Wii game console, jumped 6.4 percent to 23,730 yen. Soichiro Fukuda, an analyst at Citigroup in Tokyo, raised the stock’s rating to “buy” from “hold,” citing the company’s prospects for an earnings recovery.
Promise rose 11 percent to 677 yen after it named Vice President Ken Kubo as its next president to replace Hiroki Jinnai, who will become chairman. The Nikkei reported the move will help boost ties with Sumitomo Mitsui, which held 21 percent of Promise’s shares at the end of March.
Kubo joined Promise in May 2007 from Sumitomo Mitsui, where he oversaw banking services for individuals.
Wynn Macau, the casino company led by billionaire Stephen Wynn, jumped 9.1 percent to HK$11 on its debut in Hong Kong. The company sold shares at HK$10.08, raising $1.63 billion in the city’s second-largest initial public offering this year.
To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net.
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