By Shani Raja
Dec. 1 (Bloomberg) -- Asian stocks rose, lifting the MSCI Asia Pacific Index to a two-week high, on speculation the Bank of Japan would enact measures to limit the yen’s gains, and as Chinese manufacturing grew at the fastest pace in five years.
Nissan Motor Co., which gets 35 percent of its revenue from North America, gained 3 percent as the BOJ’s announcement of an emergency policy meeting caused the yen to slump against the dollar. Baoshan Iron & Steel Co. surged 7.8 percent on optimism steel demand in China will increase. China Eastern Airlines Corp. rose 5.9 percent in Hong Kong after winning regulatory approval to take over Shanghai Airlines Co.
The MSCI Asia Pacific Index added 1.3 percent to 119.27 as of 7:15 p.m. in Tokyo. Japan’s Nikkei 225 Stock Average rose 2.4 percent, reversing a 1.2 percent drop. The yen, which reached a 14-year high last week against the dollar, fell as much as 1.2 percent against the U.S. currency, the most since Oct. 15. The yen pared losses as the BOJ’s announcements, which came after stock markets closed, disappointed some investors.
“Everybody will be a bit more wary than they were before about riding off any new policies by the BOJ,” said John Vail, head of global strategy in Tokyo at Nikko Asset Management Co., which manages $93 billion in assets. “Unless something else comes out, the equity market might be a bit disappointed.”
China’s Shanghai Composite Index gained 1.3 percent. Zijin Mining Group Co. jumped 7.2 percent after agreeing to buy Australia’s Indophil Resources NL. Hong Kong’s Hang Seng Index climbed 1.3 percent. South Korea’s Kospi Index added 0.9 percent after a government report showed exports rose for the first time in more than a year in November.
Dubai World
The S&P/ASX 200 Index added 0.4 percent in Australia, as the central bank raised interest rates for a third straight month amid mounting evidence of an economic recovery. Qantas Airways Ltd. rose 3.9 percent after reporting an increase in passenger numbers.
Futures on the Standard & Poor’s 500 Index added 0.8 percent. The gauge gained 0.4 percent yesterday as concerns eased about the extent of losses tied to Dubai World, the investment company seeking to delay repayment on some of its $59 billion of liabilities. Dubai World said it’s in “constructive” talks with banks to restructure about $26 billion in debt.
The MSCI Asia Pacific Index surged 3.3 percent yesterday, the most in eight months, amid speculation the region’s companies will be sheltered from most of the Dubai losses.
The gauge has climbed 69 percent from a five-year low on March 9 on signs of a global economic recovery. Stocks in the MSCI benchmark are valued at 21.5 times estimated earnings, more than the S&P 500’s 17 times.
‘Stretched’ Valuations
“Valuations are probably a bit stretched,” said Alistair Thompson, who helps manage $31 billion at First State Investments in Singapore. “Dubai serves as a stark reminder that there are an awful lot of risks out there. We’re not through the woods yet.”
Nissan advanced 3 percent to 645 yen on speculation possible steps by the central bank aimed at weakening the yen will help boost the value of Japanese exports. Komatsu Ltd., which generates 22 percent of sales from the Americas, jumped 4.3 percent to 1,771 yen.
Japan’s currency fell against all 16 major counterparts as the BOJ started its meeting at 2 p.m. in Tokyo. The central bank said afterward that it will provide short-term loans to commercial banks and kept its key overnight lending rate at 0.1 percent. Kyodo News had reported the central bank will consider monetary easing steps amid pressure to halt falling prices.
Disappointing Announcement
“What a disappointment,” said Daisuke Uno, chief strategist in Tokyo at Sumitomo Mitsui Banking Corp. in Tokyo. “Since they went out of their way to hold an emergency meeting, I thought they would at least boost purchases of long-term government bonds.”
Baoshan Iron & Steel, China’s largest steelmaker, gained 7.8 percent to 8.81 yuan. Anhui Conch Cement Co., the biggest Chinese construction-materials producer, rose 5.7 percent to 46.25 yuan.
A purchasing managers’ index released today by HSBC Holdings Plc rose to a seasonally adjusted 55.7 from 55.4. The government’s PMI, also released today, held at an 18-month high.
“We are still confident that China’s economy is on a solid track,” said Nina Wu, who co-manages a $991 million Greater China fund at Hamon Asset Management Ltd. in Hong Kong.
The Organization for Economic Cooperation and Development on Nov. 19 raised its forecast for growth in the leading developed economies next year to 1.9 percent from 0.7 percent previously and predicted a further acceleration in 2011 as China powers a global recovery.
Falling Prices
Premier Wen Jiabao called yesterday for China and Europe to maintain the intensity of stimulus measures as the global economy starts to recover from the worst financial crisis since the 1930s. South Korea’s exports rose 18.8 percent in November from a year earlier, the first increase in 13 months, a government report today showed.
China Eastern Airlines climbed 5.9 percent to HK$3.06 in Hong Kong. Conditional approval from China’s securities regulator for a takeover of Shanghai Airlines clears the final hurdle for a combination that will create the nation’s second- biggest carrier. Shanghai Airlines rose 2.2 percent to 6.96 yuan.
Zijin Mining gained 7.2 percent to 10.72 yuan. The company agreed to pay A$545 million ($500 million) for Indophil Resources to gain a stake in Southeast Asia’s largest untapped copper and gold deposit. Melbourne-based Indophil surged 11 percent to A$1.20.
In Sydney, Qantas, Australia’s biggest airline, rose 3.9 percent to A$2.70 after saying group passengers increased by 6.7 percent in October from the previous year. Restaurant Brands New Zealand Ltd., which has the KFC, Pizza Hut and Starbucks franchises, jumped 11 percent to NZ$1.62, after saying full-year earnings will rise about 50 percent.
To contact the reporters for this story: Shani Raja in Sydney at sraja4@bloomberg.net.
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