Most Asian Stocks Rise as Europe Considers $1.3 Trillion Bailout Package

By Yoshiaki Nohara and Masaaki Iwamoto - Oct 21, 2011 9:39 AM GMT+0700

Most Asian stocks rose, narrowing weekly losses on the region’s benchmark index, as European policy makers consider deploying $1.3 trillion to fight the region’s debt crisis.

Fanuc Corp. (6954), a Japanese manufacturer of industrial robots that gets 75 percent of its sales abroad, rose 1.9 percent. Samsung Electronics Co., South Korea’s biggest exporter of consumer electronics, gained 1.4 percent. LG Display Co., the world’s second-largest maker of liquid-crystal displays, jumped 7 percent after analysts said losses will narrow in the current quarter.

The MSCI Asia Pacific Index rose 0.2 percent to 115.45 at 11:37 a.m. in Tokyo. More than half of the stocks on the benchmark gauge rose ahead of a European debt summit this weekend. The measure has dropped 1.2 percent this week.

“It looks like European leaders are making progress, but there’s still a long way to go,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “The market remains very vulnerable.”

Futures on the Standard & Poor’s 500 Index gained 0.4 percent today. The index rose 0.5 percent yesterday in New York after a report that Europe may combine temporary and permanent rescue funds to make as much as 940 billion euros ($1.3 trillion) available to fight the crisis, according to two people familiar with the matter.

Second Summit

Gains were limited on concern European policymakers will struggle to reach a resolution at the Oct. 23 summit. German Chancellor Angela Merkel and French President Nicolas Sarkozy said in a joint statement they want agreement on a “comprehensive and ambitious” plan as the European Union prepares for a second summit within three days of this weekend’s meeting.

“There’s a lot of information and a lot of uncertainty whether this weekend’s meeting will come out with a definitive plan or there’s more to come after that,” Colonial’s Halmarick said.

Japan’s Nikkei 225 Stock Average was little changed today. South Korea’s Kospi Index rose 1.3 percent, while Australia’s S&P/ASX 200 added 0.5 percent. Hong Kong’s Hang Seng Index rose 0.3 percent.

Shares of Asian exporters were mixed. Fanuc advanced 1.9 percent to 12,120 yen in Tokyo. Samsung Electronics gained 1.4 percent to 920,000 won in Seoul. Honda Motor Co., Japan’s second-largest carmaker by market value, fell 0.5 percent to 2,293 yen. Li & Fung Ltd., the biggest supplier of clothes and toys to retailers including Wal-Mart Stores Inc., fell 2.9 percent to HK$12.24.

Financial Shares

Financial shares were little changed even after U.S. banks gained the most among 10 industries in the S&P 500 Index yesterday, adding 1.8 percent as a group. National Australia Bank Ltd. (NAB), Australia’s fourth-biggest lender by market value, rose 1.4 percent to A$24.62, while Mizuho Financial Group Inc., Japan’s third-largest lender by market value, fell 0.9 percent to 110 yen.

The MSCI Asia Pacific Index declined 16 percent this year through yesterday amid concern Europe’s debt crisis will damage the banking system and U.S. growth is sputtering. That compares with slides of 3.4 percent by the S&P 500 and 16 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 11.7 times estimated earnings on average, compared with 12.2 times for the S&P 500 and 10 times for the Stoxx 600.

LG Display jumped 7.1 percent to 24,100 won after analysts from LIG Investment & Securities Co. and Hyundai Securities Co. said losses will narrow in the current quarter.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Masaaki Iwamoto in Tokyo at miwamoto4@bloomberg.net

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