Asian Stocks Rise as U.S. Manufacturing Expands; Toyota Climbs

By Jonathan Burgos and Shani Raja

Feb. 2 (Bloomberg) -- Asian stocks climbed, driving the MSCI Asia Pacific Index up the most in more than two weeks, after U.S. manufacturing expanded more than estimated and Australia unexpectedly refrained from raising interest rates.

Canon Inc., a camera maker that gets about 28 percent of revenue from the Americas, added 2.7 percent in Tokyo. Toyota Motor Corp. gained 4.5 percent after the automaker said it will resume some production operations that were halted. Mitsui Mining & Smelting Co. climbed 7.2 percent in Tokyo after raising its profit forecast. Westfield Group, the world’s largest owner of shopping malls by value, climbed 4.5 percent in Sydney after announcing a dividend payment.

“Markets overall were as oversold as they had been for some months and a bounce was expected,” Prasad Patkar, who helps manage about $1.5 billion at Platypus Asset Management in Sydney. “The world is a markedly better place, in an economic sense, than it was 12 months ago so there is good reason to believe the market will stay bid.”

The MSCI Asia Pacific Index gained 1 percent to 117.39 as of 5:29 p.m. in Tokyo, the biggest advance since Jan. 14. The gauge sank 3 percent last month, the most since February last year, on concern central banks from China to India will tighten monetary policy to curb inflation.

Australia’s S&P/ASX 200 Index climbed 1.8 percent, the biggest advance among Asia Pacific benchmark indexes, after the country’s central bank kept the overnight cash rate target at 3.75 percent after three increases.

Nikkei Advances

Japan’s Nikkei 225 Stock Average advanced 1.6 percent. DeNA Co., a Japanese operator of auction and shopping Web sites, soared 19 percent after reporting higher sales. Office equipment maker Brother Industries Ltd. climbed 8.9 percent as it raised its profit forecast.

China’s Shanghai Composite Index lost 0.2 percent as concern the government will curb lending spurred declines by developers and overshadowed gains by commodity producers. Hong Kong’s Hang Seng Index added 0.1 percent.

Futures on the Standard & Poor’s 500 Index lost 0.3 percent. The gauge added 1.4 percent in New York yesterday after measures of manufacturing and incomes increased more than economists estimated.

The Institute for Supply Management’s factory index rose to 58.4, exceeding the highest estimate in a Bloomberg News survey of economists. Readings greater than 50 signal expansion. Incomes climbed 0.4 percent, also more than expected, according to the Commerce Department in Washington.

Pedal Repairs

Canon added 2.7 percent to 3,610 yen. Sony Corp., which gets about 24 percent of sales from the U.S., gained 3.1 percent to 3,155 yen.

Toyota, which gets about 31 percent of sales from North America, climbed 4.5 percent to 3,605 yen after saying its dealers will begin fixing flawed gas-pedals that caused the car maker to recall over 5 million vehicles and that its North American assembly operations will resume on Feb. 8. The stock slumped 18 percent through yesterday since the company announced the initial recall on Jan. 21.

Yesterday’s U.S. data added to signs global growth is accelerating. Two surveys released yesterday showed the Chinese economy sustained its manufacturing expansion in January as export orders jumped and inflation pressure grew. China’s economy expanded 10.7 percent in the fourth quarter while consumer prices rose a higher-than-estimated 1.9 percent in December from a year earlier, government data on Jan. 21 showed.

Mining Stocks Climb

A gauge of material producers on the MSCI Asia Pacific Index rose 1.9 percent as the U.S. manufacturing data boosted the prospects for commodities demand. The materials gauge is the MSCI Asia Pacific’s second-best performer in the past 12 months.

BHP Billiton Ltd., the world’s largest mining company, rose 3.2 percent to A$40.46. Rio Tinto Group, the world’s No. 3 mining company, advanced 5.3 percent to A$71.01. Mitsubishi Corp., a Japanese trading house which gets about 40 percent of sales from metals and energy, rose 5.1 percent to 2,249 yen. Jiangxi Copper Co. Ltd., China’s biggest producer of the metal, gained 1.7 percent to HK$15.82 in Hong Kong.

“The better-than-expected U.S. data are a positive for the market,” said Fumiyuki Nakanishi, a senior strategist at Tokyo- based SMBC Friend Securities Co. “Commodities are also swinging back.”

Mitsui Mining surged 5.1 percent to 247 yen. The company doubled its net income forecast for the year ending March 31 to 8 billion yen ($89 million), saying higher zinc prices are boosting sales.

Unexpected Decision

In Sydney, Westfield climbed 4.5 percent to A$12.90 after reporting a dividend for the six months to Dec. 31 of 47 Australian cents a share.

Commonwealth Bank of Australia rose 1.1 percent to A$53.55, while Telstra Corp., the nation’s biggest phone company, added 1.8 percent to A$3.38 as today’s rate decision confounded the forecast of all 20 economists in a Bloomberg News survey for a quarter-point increase.

“This is a big relief and reduces the serious risk of a policy blunder,” said Platypus Asset’s Patkar.

Concerns that central banks will take steps to prevent regional economies from overheating has brought the average price of the MSCI Asia Pacific Index’s companies down to 1.54 times book value from 1.65 times on Jan. 15, when the index settled at a 17-month high.

China last month required banks to raise their reserve ratios and asked some banks to curb lending. The Reserve Bank of India increased the reserve ratio for banks on Jan. 29, while the Philippines boosted the rate it charges for lending money to banks from yesterday.

‘Buying Opportunity’

“Recent declines provide a good buying opportunity,” Wang Tao, president of the Technical Analysis Society of Singapore, told Bloomberg Television. The MSCI Asia Pacific’s 200-day moving average could provide a strong support for the gauge, he said. The index’s 200-day moving average is presently at 112.21, according to data compiled by Bloomberg.

The MSCI Asia Pacific Index advanced 34 percent last year, the most since 2003, on optimism growth in Asia, led by China and India, will help drag the global economy out of its worst recession since World War II. The MSCI World Index climbed 27 percent in 2009.

DeNA surged 19 percent to 625,000 yen after saying sales for the nine months ended Dec. 31 rose 7.1 percent. Brother Industries gained 8.9 percent to 1,100 yen. The company reported a 19 percent increase in net income for the nine-months ended Dec. 31 and raised its full-year forecast by 16 percent.

To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.