Asian Stocks Rise, Paring a Weekly Loss, on ECB Offer of Dollars to Banks

By Anna Kitanaka and Shani Raja - Sep 16, 2011 1:34 PM GMT+0700

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Samsung Electronics Co., which receives 20 percent of its revenue from Europe, jumped 2.9 percent in Seoul. Photographer: SeongJoon Cho/Bloomberg

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Sept. 16 (Bloomberg) -- Timothy Moe, a Hong-Kong based strategist at Goldman Sachs Group Inc., talks about the outlook for Asian stocks and investor sentiment. He speaks from Singapore to Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

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Sept. 15 (Bloomberg) -- Kirk Hartman, chief investment officer of Wells Capital Management in Los Angeles, talks about global financial markets and the U.S. economy. Hartman speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

Asian stocks rose, trimming losses on the regional benchmark index this week, after the European Central Bank and international policy makers coordinated to lend dollars to euro-area banks, increasing confidence the region’s debt crisis may be contained.

Samsung Electronics Co., which depends on Europe for 20 percent of its sales, jumped 3.5 percent in Seoul. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest lender by market value, increased 4.6 percent in Tokyo, leading financial shares higher. BHP Billiton Ltd. (BHP), the world’s biggest mining company, added 1.6 percent after metal prices rose. Tokyo Electric Power Co., the operator of the stricken Fukushima Dai-Ichi nuclear-power plant, fell 5.9 percent. Esprit Holdings Ltd. (330) headed for its biggest loss since 1997 after reporting profits plunged.

The MSCI Asia Pacific Index gained 2.1 percent to 120.40 as of 3:16 p.m. in Tokyo, with nine of the 10 industry groups on the measure rising. The gauge advanced for a second day, rebounding from its lowest level since Aug. 25, 2010. For the week, the index is headed for 0.3 percent loss.

“What these authorities are trying to do here is preempt any panic over banks’ access to short-term funding,” said Prasad Patkar, who helps manage about $1.1 billion at Platypus Asset Management Ltd. in Sydney. “Anything that suggests they will act proactively to avoid another Lehman-style crisis will help equities, commodities and other risk assets because of how oversold they are, and how bearishly everybody is positioned.”

　　　　　　　　　　 Global Concerns

Concern the global economy was slipping back into a recession amid a worsening European-debt crisis and slowing U.S. growth triggered a 16 percent plunge in the MSCI Asia Pacific Index between this year’s high on May 2 and yesterday.

Japan’s Nikkei 225 Stock Average climbed 2.3 percent today. South Korea’s Kospi Index rose 3.7 percent. Australia’s S&P/ASX 200 Index advanced 1.9 percent in Sydney. Hong Kong’s Hang Seng Index rose 1.9 percent and China’s Shanghai Composite Index increased 0.1 percent.

Futures on the Standard & Poor’s 500 Index were little changed. The index advanced yesterday in New York for a fourth day, rising 1.7 percent, as the ECB coordinated with the Federal Reserve and other central banks to extend three-month loans to euro-area lenders to ensure they have enough cash for the rest of the year.

Samsung Electronics jumped 3.5 percent to 798,000 won in Seoul, the single biggest support to the MSCI Asia Pacific Index. Canon Inc. (7751), which depends on Europe for about a third of its sales, added 4.3 percent to 3,410 yen in Tokyo.

Banks Lead Gains

Financial stocks provided the biggest support to the MSCI Asia Pacific Index, with the measure tracking banks increasing 2.4 percent.

Mitsubishi UFJ rose 4.6 percent to 345 yen, the biggest support to Japan’s Topix Index, while Westpac Banking Corp. (WBC), Australia’s No. 2 lender by market value, gained 2.6 percent to A$19.92.

“There needs to be more coordinated action and I think markets are taking this very positively,” Kirk Hartman, chief investment officer of Wells Capital Management in Los Angeles, told Susan Li on Bloomberg Television’s “First Up.” “I don’t think we’re going to having a banking crisis, but I think we are going to have more turmoil. Clearly there are issues, but I think over time it will work itself out.”

Metals Increase

Raw-material producers posted the second-biggest increase among the MSCI Asia Pacific Index’s 10 industry groups after a measure of prices for metals including copper and aluminum rose for the first time since Sept. 8. The London Metal Exchange Index advanced 1.2 percent yesterday.

BHP added 1.6 percent to A$38.23, the fourth-biggest contribution to the MSCI Asia Pacific Index’s advance. Rio Tinto Group, the world’s second-largest mining company by sales, climbed 2.7 percent to A$71.27. Jiangxi Copper Co., China’s No. 1 producer of the metal, 3.6 percent to HK$18.66 in Hong Kong.

Among stocks that fell, Tokyo Electric declined 5.9 percent to 335 yen in Tokyo, the steepest drop on the Nikkei 225. Japan’s banking lobby repeated that the nation’s banks won’t forgive loans made to the utility, even after a government official said creditors should help support the nuclear-plant operator.

Esprit tumbled 20 percent to HK$12.02 today, extending yesterday’s 18 percent plunge. The stock posted the biggest decline and is the heaviest drag on the MSCI Asia Pacific Index. The clothier yesterday said profit plunged 98 percent, prompting cuts on its investment rating by at least seven brokerages, including UBS AG, Barclays Plc and JPMorgan Chase & Co. The stock is headed for its steepest drop since Oct. 1997.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net