Asian Stocks, Won, Oil Rise as Europe Takes Steps to Address Debt Crisis

By Lynn Thomasson - Nov 11, 2011 3:18 PM GMT+0700

Stocks rose and South Korea’s won gained as Europe took steps to address its debt crisis. Copper advanced, snapping a five-day stretch of losses.

The MSCI All Country World Index increased 0.2 percent as of 8:08 a.m. in London, after falling 3.1 percent in the past two days. The Stoxx Europe 600 Index rose 0.3 percent and Standard & Poor’s 500 Index futures advanced 0.3 percent. The euro rose 0.2 percent to $1.3641. The won strengthened 0.7 percent to 1,126.61 per dollar. The cost of protecting Asia- Pacific corporate and sovereign bonds from default decreased, with the Markit iTraxx Asia index falling six basis points.

“The news headlines have been all about Europe, and behind the scenes, the U.S. economy has significantly improved,” said Stan Shamu, a strategist at IG Markets in Melbourne. “Some companies with established earnings will get a bit of traction from investors who are looking into gaining a bit of value.”

U.S. initial jobless claims fell to the lowest level in seven months and former vice president of the European Central Bank Lucas Papademos was named Greece’s interim leader. Italy’s Senate will vote on debt-reduction measures today, paving the way for a new government that may be led by former European Union Competition Commissioner Mario Monti. Economic data may show U.S. consumer confidence climbed for a third month, according to economists’ forecasts compiled by Bloomberg.

The advance in the MSCI All Country World today trimmed its weekly loss to 2 percent. The gauge is poised for its first back-to-back weekly decline since August. Stocks in the global benchmark are valued at 12.2 times reported profit, higher than the three-year low of 11.2 reached in October, data compiled by Bloomberg show.

Esprit Rallies

Sony Corp., Japan’s biggest exporter of consumer electronics, rose 2.4 percent. Hynix Semiconductor Inc. climbed for the first time in five days, advancing 0.2 percent, in Seoul after SK Telecom Co., South Korea’s No. 1 mobile-phone company, offered to buy 20 percent of the world’s second-largest memory- chip maker.

Esprit Holdings Ltd. (330) rose 4.7 percent, the biggest increase since Oct. 27. Chief Executive Officer Ronald Van Der Vis bought 300,000 shares of the clothing company on Nov. 7, according to a filing to the Hong Kong stock exchange.

Hong Kong’s Hang Seng Index advanced 0.9 percent after plunging 5.3 percent yesterday, Japan’s Nikkei 225 (NKY) Stock Average rose 0.2 percent and Australia’s S&P/ASX 200 rose 1.2 percent. Jobless claims in the U.S. fell by 10,000 to 390,000 in the week ended Nov. 5, to the lowest level in seven months, government figures showed yesterday.

Yen Strengthens

The yen rose to the strongest level against the dollar since Japan intervened on Oct. 31. The currency advanced 0.3 percent to 77.44 per dollar before Italy sells as much as 3 billion euros ($4.1 billion) of five-year bonds on Nov. 14, testing investor appetite for the nation’s debt. The ECB bought Italian government bonds yesterday, according to three people familiar with the transactions.

“These markets are balanced on a knife edge,” Simon Flood, chief investment officer at Lion Global Investors Ltd., told Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” The firm oversees about $22 billion. “Until we get some clarity and some political leadership both in Europe and the U.S., the markets are going to continue to be volatile.”

Europe Progress

The won gained as the Bank of Korea kept its seven-day repurchase rate at 3.25 percent, a decision predicted by all 17 economists surveyed by Bloomberg News.

Rubber in Tokyo jumped as much as 4 percent to 262.8 yen a kilogram, gaining for the first time this week, tracking overnight gains in crude oil that boosted its appeal against synthetic rivals and a rally in equity markets. Futures are still set for a 12 percent drop this week, the most since March.

Oil has risen 3.9 percent this week, poised for a sixth weekly gain in New York. Crude may fall next week as the European debt crisis affects the world’s demand outlook, a Bloomberg News survey showed. Copper advanced 0.6 percent to $7,522 a metric ton on the London Metal Exchange, paring a second weekly decline. Spot gold gained for the first time in four days, rising 0.4 percent to $1,764.85 an ounce.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan fell to 201 basis points, Royal Bank of Scotland Group Plc prices show. The gauge is set for the lowest daily close since Nov. 8, according to data provider CMA. The U.S. bond market is closed today for a public holiday.

To contact the reporter on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net.

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.