May 19 (Bloomberg) -- Asian stocks rose, led by finance companies, as U.S. banks applied to repay relief funds to the government and a drop in borrowing costs stoked optimism the financial crisis is easing.
Mitsubishi UFJ Financial Group Ltd. gained 5.6 percent in Tokyo as the London interbank offered rate fell the most in two months. Toyota Motor Corp., which gets a third of its sales in North America, rose 2.8 percent as the yen weakened. PetroChina Co., the nation’s biggest oil producer, surged 6 percent in Hong Kong as Goldman Sachs Group Inc. predicted oil prices will rise. Futures on India’s Nifty Index climbed 5 percent following a surge in American depositary receipts on election results.
“There are indications the banking system in the U.S. and parts of Europe are improving,” said Paul Xiradis, who manages $8 billion as chief executive officer of Ausbil Dexia Ltd. in Sydney. “That means the recovery will occur perhaps sooner than expected a few months ago.”
The MSCI Asia Pacific Index advanced 2.5 percent to 99.24 at 1:16 p.m. in Tokyo, with finance companies accounting for 34 percent of the increase. The gauge has climbed 40 percent from a more than five-year low on March 9.
“When we look back on these times, we’ll see the global economy bottomed out in the April-June period,” said Fumiyuki Nakanishi, a strategist at SMBC Friend Securities Co.
Japan’s Nikkei 225 Stock Average climbed 3 percent to 9,306.76. Australia’s S&P/ASX 200 Index added 2.2 percent and Hong Kong’s Hang Seng Index jumped 3.1 percent. Trading in India is due to resume today as a 17 percent surge in the Sensitive Index triggered a suspension yesterday.
‘More Confident’
China Mobile Ltd. climbed 4.6 percent in Hong Kong trading on speculation the company will seek acquisitions. Asahi Glass Co., which makes glass substrates for plasma-display panels, surged 8.9 percent in Tokyo after Daiwa Securities Group Inc. recommended investors buy the stock. Filinvest Land Inc. rose 4.7 percent in Manila on brokerage upgrades.
Futures on the Standard & Poor’s 500 Index were little changed. The gauge climbed 3 percent yesterday, the most in two weeks, as Goldman Sachs, JPMorgan Chase & Co. and Morgan Stanley applied to repay the combined $45 billion they received in October from the government’s Troubled Asset Relief Program, said people familiar with the matter.
“U.S. financial institutions paying back government aid is a good sign that they are becoming more confident,” said Yoji Takeda, who manages $1.1 billion at RBC Investment (Asia) Ltd. in Hong Kong. “Macro economic data have been showing signs of bottoming. We need to see more of this for a sustained rally.”
Borrowing Costs
Mitsubishi UFJ, Japan’s biggest publicly traded bank, advanced 5.6 percent to 625 yen. Westpac Banking Corp., Australia’s biggest lender by market value, added 2.8 percent to A$20.07. HSBC Holdings Plc, Europe’s largest lender, gained 5 percent to HK$67.50 in Hong Kong.
The three-month Libor had its biggest decline since March 19 yesterday, according to British Bankers’ Association data. It has fallen for the past 34 days, as credit markets thawed amid record low interest rates and rising customer deposits.
“We’ve seen credit spreads coming back dramatically and global and Libor rates contracting,” said Ausbil’s Xiradis. “Those are good lead indicators.”
The surge in equities signaled investors are more willing to take risk, making the yen less attractive as a haven. The yen depreciated against the dollar to as low as 96.62 today from 95.03 at the 3 p.m. close of stock trading in Tokyo yesterday.
Overseas Sales
Toyota rose 3.7 percent to 3,690 yen on speculation a weaker yen will boost the value of overseas sales. Canon Inc., which gets 28 percent of sales in the U.S., climbed 4.8 percent to 3,300 yen.
PetroChina jumped 6 percent to HK$8.53. Cnooc Ltd., China’s biggest offshore oil producer, added 4.6 percent to HK$10.40. Inpex Corp., Japan’s largest oil explorer, climbed 4.9 percent to 704,000 yen. in Hong Kong.
Goldman Sachs upgraded PetroChina to “neutral” from “sell,” according to a report. The brokerage raised Cnooc and Inpex Corp. to “buy” from “neutral.”
Oil prices will average $70 a barrel next year due to a recovery in demand and as supply remains constrained, Goldman Sachs said. Crude oil futures gained 4.8 percent to $59.03 a barrel in New York yesterday, the highest settlement since Nov. 11. Prices were little changed in after-hours trading.
Indian shares trading in the U.S. rallied on speculation Prime Minister Manmohan Singh’s Congress party victory in nationwide elections will speed up economic reforms and lure overseas funds. The Bank of New York Mellon India ADR Index surged 16 percent.
Overseas Acquisitions
American depositary receipts of ICICI Bank Ltd., India’s second-largest lender, climbed 25 percent to the highest in eight months after Morgan Stanley raised its recommendation on the country’s financial stocks.
China Mobile climbed 4.6 percent to HK$75.60. The company’s Chairman Wang Jianzhou said in the city today that there is a “good opportunity” for overseas acquisitions as phone assets are “inexpensive.”
Asahi Glass rallied 8.9 percent to 671 yen, set to close at its highest level since Oct. 15. The shares were boosted to “buy” from “neutral” by Daiwa analyst Yusuke Ando.
Filinvest, the fourth-largest Philippine builder, jumped 4.7 percent to 67 centavos after Credit Suisse Group and JPMorgan Chase & Co. raised their share-price estimates.
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