Asian Stocks Extend Global Rally on U.S. Treasury’s Bank Plan

March 24 (Bloomberg) -- Asian stocks rose, extending a rally that has driven the MSCI World Index to a five-week high, on optimism the U.S. Treasury’s plan to remove banks’ toxic assets will revive economic growth.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest publicly traded bank, surged 3.9 percent after the U.S. said it will finance as much as $1 trillion in purchases of banks’ distressed assets. BHP Billiton Ltd., Australia’s largest oil producer, added 2.2 percent after oil prices rose. Toyota Motor Corp., which gets 37 percent of sales from North America, gained 3.6 percent in Tokyo after the yen weakened against the dollar.

“Investors are riding a tide of euphoria over the U.S. plan,” Mamoru Shimode, chief equity strategist at Resona Trust & Banking Co. said in an interview with Bloomberg Television. “Whether $1 trillion will suffice or there will be willing sellers remains to be seen.”

The MSCI Asia Pacific Index advanced 1.6 percent to 83.52 at 11:17 a.m. in Tokyo, adding to a 3.4 percent gain yesterday. The gauge has rallied 18 percent from a five-year low on March 9 amid speculation the worst of the financial crisis is over. The MSCI World rose 0.6 percent to 834.86, the highest since Feb. 13.

Hong Kong’s Hang Seng Index climbed 1.7 percent, taking its gains since March 9 to 21 percent. Gains of more than 20 percent indicate stocks have entered a bull market. Japan’s Nikkei 225 Stock Average climbed 2.1 percent. All markets advanced.

Futures on the U.S. Standard & Poor’s 500 Index lost 0.4 percent today. The gauge soared 7.1 percent in New York, the biggest advance since Oct. 28 and narrowing this year’s loss to 8.9 percent. Europe’s Dow Jones Stoxx 600 Index gained 3 percent to the highest close since Feb. 19.

Purchasing Power

Macquarie Countrywide Trust, an Australian real estate investment trust, rallied 12 percent after saying it had sold five properties. Nippon Steel Corp. and JFE Holdings Inc., Japan’s two largest mills, added at least 3 percent after winning price cuts for hard coking coal.

The Treasury, Federal Reserve and Federal Deposit Insurance Corp. will provide private investors with financing to buy illiquid loans and securities held by banks, the Treasury said yesterday. The Public-Private Investment Program will use up to $100 billion from the $700 billion Troubled Asset Relief Program enacted last year, giving the government “purchasing power” of $500 billion, which may double over time, the Treasury said.

The proposal was the latest government response to the financial crisis that has hampered bank lending and dragged the global economy into what the World Bank estimates will be the first contraction in more than six decades.

Finance Stocks Rally

The Fed pledged on March 18 to buy as much as $300 billion of Treasuries and stepped up purchases of mortgage bonds to bring down borrowing costs. The Bank of Japan said earlier the same day that it will raise the amount of government debt it buys from banks each month.

Mitsubishi UFJ surged 3.9 percent to 532 yen. Mizuho Financial Group Inc., Japan’s second-largest publicly traded bank, rose 4.1 percent to 229 yen.

The Bank of Japan will brief executives of 14 major banks today on its plans to provide subordinated loans to help them bolster capital, Nikkei English News reported, without saying where it obtained the information.

An index of finance stocks on the MSCI Asia Pacific Index climbed 2.1 percent. The sub-index is the worst performer among the broader gauge’s 10 industry groups in the past 12 months, as credit losses worldwide swelled to more than $1.2 trillion.

Oil Prices Surge

Commonwealth Bank of Australia, the nation’s largest mortgage lender, climbed 2.1 percent to A$35.82 in Sydney. KB Financial Group Inc., which controls South Korea’s largest bank, gained 4.8 percent to 35,100 won.

BHP added 2.2 percent to A$34.06. Woodside Petroleum Ltd., Australia’s second-largest oil producer, climbed 4.2 percent to A$40.06. In New York, crude-oil futures jumped 3.3 percent to $53.80 a barrel yesterday, the highest settlement since Nov. 28.

Toyota gained 3.6 percent to 3,160 yen, and Canon Inc., the world’s largest camera maker, rose 4.2 percent to 2,875 yen after the Japanese currency depreciated against the dollar to as much as 97.35 from 96.18 at the 3 p.m. close of stock trading in Tokyo yesterday. A weaker local currency boosts the value of overseas sales for Japanese companies.

Macquarie Countrywide Trust, an Australian real estate investment trust, rallied 12 percent to 23.5 Australian cents after saying it sold five properties for A$92.6 million ($66 million).

Nippon Steel, the world’s No. 2 producer of the alloy, advanced 3.4 percent to 278 yen, and rival JFE rose 3 percent to 2,275 yen. The companies negotiated a 57 percent cut in the price they pay BHP for hard coking coal, two industry executives with knowledge of the deal said.