Asian Stocks Complete Best Week Since 2007, Enter Bull Market

March 28 (Bloomberg) -- Asian stocks posted their biggest weekly gain since August 2007 amid optimism governments worldwide will succeed in reviving lending and global growth.

The MSCI Asia Pacific Index has rallied 21 percent from a five-year low on March 9, technically entering a bull market. Toyota Motor Corp., which gets 37 percent of its sales from North America, gained 10 percent in Tokyo on optimism the U.S. Treasury’s plan to remove banks’ toxic assets will revive economic growth. BHP Billiton Ltd., the world’s No. 1 mining company, climbed 5.7 percent in Sydney after prices for oil and metals advanced.

“We are building a base for the next bull market,” Mark Mobius, who helps oversee about $20 billion of emerging-market assets at Templeton Asset Management Ltd., said in Hong Kong. “You have to be careful not to miss the opportunity. With all the negative news, there is a tendency to hold back.”

MSCI’s Asian benchmark gauge rose 7.5 percent to 85.49 this week, its best weekly performance since the week ended Aug. 24, 2007. A measure tracking energy stocks on the MSCI gauge rallied 11 percent this week, the sharpest jump among the 10 industry groups on the MSCI Asia Pacific Index.

Hong Kong’s Hang Seng Index rose 10 percent, its best week since October. Japan’s Nikkei 225 Stock Average climbed 8.6 percent while South Korea’s Kospi Index added 5.7 percent.

Governments from the U.S. to Japan are widening measures to ease the financial crisis, which has caused more than $1 trillion of losses worldwide, and to avert what the World Bank predicts will be the first global economic contraction since World War II.

Government Action

The U.S. Treasury announced on March 23 plans to rid banks of toxic real-estate assets. The country and Japan also pledged on March 18 to buy government debt, while banks including Barclays Plc reported strong starts to the year.

Toyota jumped 10 percent to 3,260 yen in Tokyo this week. Sony Corp., which gets a quarter of its sales from the U.S., surged 13 percent to 2,225 yen. Samsung Electronics Co., the world’s biggest maker of computer memory, rose 7.8 percent to 584,000 won in Seoul.

“When you consider how much money governments have thrown at the crisis to get liquidity going, you’d think it’ll have some effect,” said Chris Hall, who helps oversee about $2 billion at Adelaide, South Australia-based Argo Investments. “It’ll take a bit of time to all come through.”

BHP climbed 5.7 percent to A$34.01 in Sydney this week. Cnooc Ltd., China’s biggest offshore oil producer, jumped 11 percent to HK$8.33 in Hong Kong. Crude oil added 2.6 percent to $52.38 a barrel in New York this week. A measure of six primary metals traded in London fell 0.1 percent.

Rising Valuations

Rio Tinto Group, the world’s third-largest mining company, soared 21 percent to A$56.88. The company said March 26 that it had an alternative plan should Aluminum Corp. of China’s $19.5 billion investment deal fail.

MSCI’s Asian benchmark gauge rose 13.7 percent in March, which was the biggest monthly gain since October 1998, when governments were cutting interest rates to alleviate the Asian financial crisis.

The gains pared the measure’s drop this year to 4.6 percent, and raised the average valuation of companies on the MSCI Asia Pacific Index yesterday to 16.7 times profit, the highest level since December 2007, data compiled by Bloomberg show.

The gauge’s 14-day relative strength index, which measures how rapidly prices have risen or fallen, yesterday rose above the level of 70 that some traders use as a signal to sell.

“The market will remain resilient, though technical indicators indicate it is overheating,” said Mitsushige Akino, who oversees the equivalent of $615 million at Tokyo-based Ichiyoshi Investment Management Co.

Industrial & Commercial Bank of China Ltd. jumped 27 percent to HK$4.19 this week in Hong Kong as Goldman Sachs Group Inc. agreed to keep most of its stake in the company for at least another year. ICBC is the world’s most profitable bank.

Elpida Memory Inc. soared 50 percent to 735 yen in Tokyo after computer-chip prices rallied and on optimism share sales by two units will help it avoid early repayment of loans.