Asian Stocks Gain for Third Day on Policy Optimism; HSBC Rises

March 17 (Bloomberg) -- Asian stocks gained for a third day, the longest winning streak in seven weeks, as Australia’s central bank signaled it may cut interest rates and Standard Chartered Plc reported a “strong” start to 2009.

Woolworths Ltd., Australia’s biggest retailer, rose 2.1 percent in Sydney after the Reserve Bank of Australia said it had “flexibility” to lower borrowing costs. HSBC Holdings Plc, Europe’s biggest lender, gained 2.4 percent in Hong Kong as Goldman Sachs Group Inc. said earnings may recover. Mizuho Financial Group Inc., Japan’s second-largest publicly traded lender, jumped 4.2 percent after Kyodo News said the Bank of Japan may widen support for banks.

“Expectations are heightening that we’ll see some additional policies designed to aid the economy and boost stock prices,” said Fujio Ando, who helps oversee $1 billion at Tokyo- based Chibagin Asset Management Co. “This upward movement in the market could continue until the early part of April.”

The MSCI Asia Pacific Index rose 1.6 percent to 77.43 as of 1:34 p.m. in Tokyo, with finance companies accounting for 41 percent of the increase. The measure climbed 7.4 percent in the past three days. The gauge is down 41 percent in the past year as slowing global growth pummeled Asia’s corporate earnings.

Japan’s Nikkei 225 Stock Average gained 2 percent to 7,860.95, while Hong Kong’s Hang Seng Index gained 0.6 percent. All markets open for trading gained except Singapore, Indonesia, India, Sri Lanka and the Philippines.

Sumco Corp., the world’s second-largest maker of silicon wafers, soared 9.5 percent Tokyo on brokerage upgrades. China Life Insurance Co., the nation’s biggest insurer, gained 1.6 percent in Shanghai as premium income rose. BHP Billiton Ltd., the world’s biggest mining company, rose 1.7 percent in Sydney as copper climbed to a four-month high yesterday.

Credit-Card Defaults

Futures on the Standard & Poor’s 500 Index were little changed. The gauge lost 0.4 percent yesterday as concern over rising credit-card defaults snuffed out a rally in financial companies. American Express Co., the largest credit-card company by purchases, reported higher delinquency rates for February.

Woolworths gained 2.1 percent to A$25.22 in Sydney. Wesfarmers Ltd., Australia’s second-largest retailer, climbed 3.3 percent to A$18.37.

The central bank’s decision to leave its key interest rate unchanged earlier this month “would leave adequate flexibility for policy at future meetings,” according to minutes of a March 3 meeting released in Sydney today.

Governments from the U.S. to China and Japan are widening measures to ease the financial crisis, which has caused more than $1 trillion of losses at institutions worldwide.

‘Eventual Recovery’

Standard Chartered, the U.K.’s second-largest bank by market value, today said it had a “strong” first two months of the year, echoing similar comments from Barclays Plc, Citigroup Inc., Deutsche Bank AG and Bank of America Corp. Standard Chartered shares in Hong Kong dropped 0.8 percent to HK$93, paring an earlier 3.6 percent slump.

The MSCI Asia Pacific Index has declined 14 percent this year, adding to a record 43 percent slide in 2008. Cuts to analysts’ earnings forecasts has left companies on the benchmark gauge trading at an average 23 times estimated profits, up from 14 times at the end of last year.

HSBC, which is raising $17.5 billion of capital in a rights offer, gained 2.4 percent to HK$40.95 in Hong Kong. Goldman Sachs raised its recommendation on the stock to “neutral” from “sell,” saying its path to “eventual recovery” is clearer.

Mizuho climbed 4.2 percent to 197 yen in Tokyo. Mitsubishi UFJ Financial Group Ltd., Japan’s biggest publicly traded bank, rose 4.8 percent to 462 yen.

Brokerage Upgrades

The Bank of Japan, which starts a two-day policy meeting today, is considering buying subordinated loans and bonds from lenders to increase their capital base, allowing them to continue providing loans to cash-strapped companies, Kyodo News reported on its Web site.

Sumco soared 9.5 percent to 1,440 in Tokyo after KBC Securities Japan and Nomura Holdings Inc. recommended investors buy the shares amid signs of a recovery in earnings.

China Life Insurance Co., the nation’s biggest insurer, gained 1.6 percent to 21.73 yuan in Shanghai. The company posted premium income of 67.2 billion yuan for the first two months of this year. That’s 12.6 percent higher than a year earlier, according to Bloomberg News calculations.

BHP added 1.7 percent to A$31.51. Rio Tinto Ltd., the world’s No. 3 mining company, added 1.4 percent to A$51.45. Copper futures in New York surged 5 percent yesterday to $1.747 a pound, having earlier risen to the highest since Nov. 11. An index of six metals on the London Metals Exchange rose 3 percent.

Woodside Petroleum Ltd., Australia’s second-largest oil producer, gained 1.5 percent to A$36.60 in Sydney. Inpex Corp., Japan’s largest oil explorer, jumped 2.5 percent to 660,000 in Tokyo. Crude oil in New York rose 2.4 percent to $47.35 yesterday, the highest settlement since Jan. 6.