Asian Stocks Rise as China’s Wen Pledges Increased Investment

March 5 (Bloomberg) -- Asian stocks gained for a second day, led by commodity and construction companies, after China’s Premier Wen Jiabao pledged to “significantly increase” investment in the world’s third-largest economy.

BHP Billiton Ltd., the world’s biggest mining company, climbed 5.1 percent in Sydney and Komatsu Ltd., the world’s No. 2 maker of earthmoving equipment, jumped 5 percent in Tokyo on speculation demand for metals and industrial machinery will rise. Mazda Motor Corp., Japan’s No. 4 carmaker, surged 10 percent as the yen weakened. Hong Kong’s Hang Seng Index and U.S. futures erased gains after Wen refrained from announcing an expansion of a 4 trillion yuan ($585 billion) spending package.

“The Chinese authorities have already greased the wheels of recovery,” said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors, which manages about $85 billion. “It may be a short-term disappointment that no further stimulus was announced, but it doesn’t undermine the China growth story.”

The MSCI Asia Pacific Index gained 0.9 percent to 72.93 as of 12:15 p.m. in Tokyo, with three stocks rising for each one that fell. The gauge has slumped 48 percent in the past year as the financial crisis dragged the world’s largest economies into recession, hurting profits at companies from BHP to Toyota Motor Corp., the world’s largest automaker.

Japan’s Nikkei 225 Stock Average climbed 2.7 percent, the most since Jan. 27, while Australia’s S&P/ASX 200 Index rose 0.6 percent. All markets open for trading in the region advanced except in Hong Kong, where the Hang Seng Index fell as much as 1.2 percent, and Singapore.

Government Intervention

Mitsui O.S.K. Lines Ltd., the world’s largest operator of iron-ore vessels, leapt 6.2 percent after shipping fees rose the most in two weeks. NEC Electronics Corp., Japan’s third-biggest chipmaker, surged 9.5 percent after Goldman Sachs Group Inc. advised investors to buy semiconductor shares.

Futures on the Standard & Poor’s 500 Index lost 0.6 percent after rising 0.5 percent earlier today. The U.S. gauge climbed 2.4 percent in New York yesterday, breaking a five-day losing streak, while Europe’s Dow Jones Stoxx 600 Index leapt 3.9 percent, the most since Dec. 8.

The MSCI Asia Pacific yesterday reversed a 1.6 percent decline to end the day 0.7 percent higher after a former Chinese statistics bureau head told reporters the premier would announce a new economic package on top of its previously announced spending plan.

China needs to “reverse the economic slide as soon as possible,” Wen told delegates to China’s parliament in Beijing today. Tumbling exports have slowed the country’s economic growth to the weakest in seven years.

Commodities Surge

Governments from the U.S. to China and Australia have sought to introduce policies this year to ease the financial crisis and bolster their economies. India’s central bank yesterday cut its key interest rate to a record low.

Speculation China’s economy will pick up steam drove up commodity prices. Crude oil in New York surged 9 percent to $45.38, the highest settlement since Jan. 26, while copper leapt 5.6 percent. The Reuters/Jefferies CRB Index of 19 commodities had its biggest rally this year.

BHP Billiton jumped 5.1 to A$28.50. Rio Tinto Group, the world’s third-largest miner, surged 5.2 percent to A$45.75.

Komatsu Ltd., the world’s second-biggest maker of earthmoving equipment, climbed 5 percent in Tokyo to 1,088 yen. Hitachi Construction and Machinery Co., the world’s largest maker of giant excavators, rose 4.4 percent to 1,266 yen.

Weaker yen

“People are keen to see how much more money China will pump into its economy,” Mitsushige Akino, who oversees about $615 million at Tokyo-based Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television. “If the country doubles its planned spending, the impact will be huge.”

Mazda Motor soared 10 percent to 137 yen after the yen depreciated against the dollar to as much as 99.49 yesterday, the weakest level since Nov. 5, from 98.44 at the 3 p.m. close of stock trading in Tokyo.

Toyota Motor Corp., which makes 37 percent of its revenue in North America, gained 1.8 percent to 3,040 yen. Honda Motor Co. climbed 3.2 percent to 2,275 yen.

Mitsui O.S.K climbed 6.2 percent to 498 yen after the Baltic Dry Index rose 2.5 percent yesterday in London, the most since Feb. 19. Nippon Yusen K.K. advanced 4.2 percent to 402 yen, the first gain in five days.

NEC Electronics surged 9.5 percent to 541 yen. Samsung Electronics Co., the world’s largest maker of computer-memory chips, gained 1.6 percent to 497,000 won.

Profits may start improving now that the companies have pared back inventory and production, Goldman Sachs analyst James Covello wrote in a report. Semiconductor supplies were 30 percent below normal levels in January, according to Goldman estimates.

Mizuho Financial Group Inc., rose 5 percent to 189 after saying yesterday it will hold 58 percent of the company to be created through the merger of Mizuho Securities Co. and Shinko Securities Co. Shinko surged 6.9 percent.