Asian Stocks Rise, Extending Global Rally, on Recovery Optimism

April 3 (Bloomberg) -- Asian stocks climbed, extending a rally that drove the MSCI World Index to a two-month high, as world leaders agreed on measures to fight the global recession and manufacturing grew in China.

Toyota Motor Corp. jumped 7.5 percent in Tokyo after the company obtained low-cost loans from a government-backed bank. Harbin Power Equipment Co., China’s No. 2 maker of electricity- generation equipment, advanced 3.3 percent in Hong Kong as production in the country expanded for the first time in six months. National Australia Bank Ltd. rose 4.9 percent as the U.S. relaxed accounting rules to boost bank profits and ease the credit crisis.

“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 gained 0.5 percent to 86.71 at 12:43 p.m. in Tokyo, taking its advance this week to 1.4 percent. The gauge has climbed 23 percent from a more than five-year low on March 9 amid speculation governments will succeed in easing the global financial crisis. A 20 percent gain is the technical level that indicates stocks may have entered a bull market.

Japan’s Nikkei 225 Stock Average added 0.3 percent to 8,747.28, cutting its decline this year to 1.3 percent.

Australia’s S&P/ASX 200 Index rose 1 percent. Markets advanced except in Hong Kong, Singapore, Thailand and Malaysia. The MSCI World Index added 0.1 percent to 853.75, set to close at its highest level since Feb. 9.

Accounting Standards

BHP Billiton Ltd. climbed 3.5 percent in Sydney even as oil pared its biggest advance in three weeks. Newcrest Mining Ltd., Australia’s largest gold producer, slumped 7.2 percent as demand for bullion as a haven declined.

Futures on the Standard & Poor’s 500 Index slipped 0.3 percent. The gauge climbed 2.9 percent yesterday as Group of 20 policy makers meeting in London pledged $750 billion to the International Monetary Fund to rescue recession-stricken nations. The agency will also get another $250 billion in Special Drawing Rights, an overdraft facility for its 185 members.

The U.S.’s Financial Accounting Standards Board also agreed to relax fair-value, or mark-to-market, accounting that requires banks to revalue assets each quarter to reflect market prices. Writedowns and credit-related losses at financial institutions have swelled to $1.29 trillion.

Toyota, the world’s largest automaker, surged 7.5 percent to 3,710 yen. The company said its finance arm will borrow from the Japan Bank for International Cooperation as a freeze in credit markets made other debt options more expensive.

Banks Climb

The automaker also rose after the yen earlier fell to 100.18 versus the dollar, a level not seen since Nov. 4. A weaker currency raises the value of exporters’ overseas sales.

National Australia Bank, the nation’s largest by assets, rose 4.9 percent to A$22.55. KB Financial Group Inc., which controls South Korea’s largest lender, rose 2.5 percent to 37,700 won in Seoul. Mitsubishi UFJ Financial Group Inc., Japan’s biggest publicly traded bank, rose 1 percent to 534 yen.

A measure of bank shares included in the MSCI Asia Pacific Index has rebounded 29 percent in the last month. The gauge is still down 24 percent in the last six months, the second-worst performer among the benchmark’s 10 industry groups.

The MSCI Asia Pacific’s rally in the past month has driven the average valuation of companies on the index to 17.7 times reported profit, the highest since Nov. 30, 2007, data compiled by Bloomberg show.

Fast Rally

“There’s growing optimism that the world economy has reached a bottom,” Yoshinori Nagano, a senior strategist at Daiwa Asset Management Co., which oversees about $96 billion, said in an interview with Bloomberg Television. “We’ve seen a fairly fast rally lately, and people will likely start getting wary of its pace.”

Harbin Power rose 3.3 percent to HK$5.66. Komatsu Ltd., a machinery maker that counts China as its fastest growing market, jumped 2.4 percent to 1,210 yen in Tokyo.

China’s Purchasing Manager’s Index, which was released yesterday, rose to a seasonally adjusted 52.4 in March from 49 in February, exceeding the threshold of 50 that divides expansion and contraction for the first time since September. statement. A reading above 50 indicates an expansion.

Growth in manufacturing may help President Hu Jintao achieve his target of 8 percent expansion for the world’s third- biggest economy.

BHP rose 3.5 percent to A$34.53. Crude oil dropped 1.5 percent in after-hours trading, after soaring 8.8 percent to $52.64 a barrel in New York yesterday, the most since March 12. Copper rose 2.2 percent to the highest since Nov. 4 as the prospect of growth in China boosts demand for industrial demands.

Rio Tinto Group, the world’s third-largest mining company, gained 3.3 percent to A$59.87. Jiangxi Copper Co., China’s largest producer of the metal, rose 2.3 percent to HK$8.98.

Newcrest Mining Ltd., Australia’s largest gold producer, slumped 7.2 percent to A$30.82. Bullion fell to the lowest in three weeks as investors shifted into risky assets from the relative safety of gold.