Asian Stocks Rally for Fourth Week on G-20 Plans, Growth Hopes

April 4 (Bloomberg) -- Asian stocks rose for the fourth- consecutive week, the longest rally in 18 months, as Group of 20 leaders agreed on measures to fight the global recession.

Toyota Motor Corp., which gets 37 percent of its sales from North America, gained 14 percent in Tokyo as U.S. auto sales rose from a 27-year low. HSBC Holdings Plc, Europe’s largest bank, rose 13 percent in Hong Kong as U.S. Treasury Secretary Timothy Geithner said economies are showing “traction.” China Petroleum & Chemical Corp., Asia’s biggest oil refiner, climbed 10 percent after Goldman Sachs Group Inc. recommended investors buy the stock.

“We’ve seen some tangible evidence that the global economy is on the path to recovery,” said Naoki Fujiwara, chief fund manager at Tokyo-based Shinkin Asset Management Co., which oversees about $6.1 billion. “This is all about sentiment and people are interpreting whatever they see in a positive way.”

The MSCI Asia Pacific Index rose 1.4 percent to 86.70 the past five days, the first time stocks have rallied for a fourth- straight week since October 2007. Consumer-related and financial companies led the advance on the gauge, which has jumped more than 20 percent from a five-year low on March 9, the level that technically indicates a bull market.

Hong Kong’s Hang Seng Index rose 3 percent, erasing its decline for the year. Japan’s Nikkei 225 Stock Average added 1.4 percent, while South Korea’s Kospi Index added 3.7 percent and Australia’s S&P/ASX 200 Index 1.7 percent.

Tighter Regulations

Governments from the U.S. to Japan are widening measures to ease the financial crisis, which has caused $1.29 trillion of losses worldwide, and to avert what the World Bank predicts will be the first global economic contraction since World War II.

Following an April 2 summit in London, G-20 policy makers proposed a regulatory blueprint that places stricter limits on hedge funds and other financiers, while pledging to triple the resources of the International Monetary Fund and to give China and other developing economies a greater say in the way the world economy is run.

Toyota, the world’s largest automaker, jumped 14 percent to 3,700 yen in Tokyo this week after industry group Autodata Corp. said 9.86 million new cars were sold in the U.S. in March, a million more than the average estimate of analysts in a Bloomberg survey.

Nissan Motor Co. jumped 19 percent to 464 yen. Toyota posted a 39 percent drop in U.S. sales last month, narrower than the 41 percent tumble analysts in a Bloomberg survey estimated. Sales at Nissan fell 38 percent, whereas analysts had projected a 42 percent slump.

‘Encouraging Signs’

HSBC surged 13 percent to HK$49.45. National Australia Bank Ltd., the nation’s largest lender, rose 8.3 percent to A$22.84 as the U.S. this week relaxed accounting rules to boost bank profits and ease the credit crisis. Woori Finance Holdings Inc., South Korea’s biggest financial company, rallied 12 percent to 8,050 won.

U.S. Treasury Secretary Geithner said ahead of the G-20 meeting that there are “encouraging signs” in markets. The U.S. Institute for Supply Management released in the week showed its factory index increased to 36.3 last month, a third- consecutive advance, while U.S. pending home resales gained 2.1 percent in February, exceeding some economists’ forecasts.

MSCI’s Asian benchmark gauge has pared losses this year to about 3.2 percent on signs government action to bolster growth is working. The gains drove average valuation of companies on the index to 17.7 times profit, the highest level since Nov. 30, 2007, data compiled by Bloomberg show.

Brokerage Upgrades

“I was pleasantly surprised by the G-20’s proposals but that doesn’t mean I’m buying into this rally,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which holds about $90 billion in assets. “Policy is certainly working in the right direction, but it’s a bit premature to say we’ve reached the bottom.”

China Petroleum climbed 10 percent in the week to HK$5.49 in Hong Kong. The stock was raised to “buy” from “neutral” at Goldman Sachs on optimism fuel-price reforms in China will boost earnings. OneSteel Ltd., the second-largest Australian steelmaker, rose 13 percent to A$2.69 after Macquarie Group Ltd. upgraded the stock to “neutral” from “underperform.”

Elpida Memory Inc. soared 15 percent to 845 yen in Tokyo after beating U.S. rival Micron Technology Inc. to partner with Taiwan Memory, the memory-chip company set up by the government, to reorganize the chip industry.