Asian Stocks Rise for Fourth Day on Economic Growth Optimism

June 3 (Bloomberg) -- Asian stocks rose for a fourth- straight day, led by banks and consumer companies, as better- than-expected U.S. homes sales and Australian economic growth reports fueled optimism the global recession is easing.

Harvey Norman Holdings Ltd., Australia’s biggest electronics retailer, climbed 5.1 percent and Westpac Banking Corp. gained 1.6 percent in Sydney as the country’s economy unexpectedly expanded in the first quarter. Nissan Motor Co., Japan’s third-largest automaker, rose 1.5 percent to an eight- month high after it posted better-than-expected U.S. sales.

“There are encouraging signs that people are out there spending,” said Tim Schroeders, who helps manage $1 billion a Pengana Capital Ltd. in Melbourne. “The question is whether it’s enough. The situation is still fairly precarious.”

The MSCI Asia Pacific Index added 0.7 percent to 105.09 as of 11:43 a.m. in Tokyo, taking its four-day advance to 4.9 percent. The gauge has climbed 49 percent from a more than five- year low on March 9.

Japan’s Nikkei 225 Stock Average gained 0.4 percent. Australia’s S&P/ASX 200 Index added 0.8 percent after the statistics bureau said first-quarter gross domestic product grew 0.4 percent from the previous quarter. The median estimate of 18 economists surveyed by Bloomberg was for a 0.2 percent decline.

South Korea’s Kospi fell as Woori Finance Holdings Co. sank 5.6 percent on concern the company may sell shares. Taiwan’s Prince Housing & Development Corp. and China Metal Products Co. fell by the daily limit in Taipei after their offices were searched by prosecutors.

Previously Owned Homes

Futures on the U.S. Standard & Poor’s 500 Index lost 0.3 percent. The gauge rose 0.2 percent yesterday as optimism the housing market is improving outweighed concern share sales will dilute stockholder value. A report yesterday showed the number of Americans signing contracts to buy previously owned homes climbed 6.7 percent in April, more than forecast and the fourth increase in five months.

Harvey Norman climbed 5.1 percent to A$3.28. Westpac added 1.6 percent to A$19.05.

Australia, helped by record interest-rate cuts, government spending and cash handouts to consumers, is one of only a few economies including China and India that expanded last quarter. Central bank Governor Glenn Stevens left the benchmark interest rate unchanged at 3 percent yesterday for a second month amid signs the economy is weathering the worst global slump since the Great Depression.

Global Recovery

Yesterday’s U.S. data added to signs of a global recovery. A Chinese purchasing manager’s index this week showed the country’s manufacturing industry expanded for a third month. Japan’s government last week raised its assessment of the economy for the first time in three years.

“The green shoots story continues to flourish,” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “Despite the many encouraging signs, we still have many hurdles to overcome before we’re out of the woods.”

Nissan gained 1.5 percent to 603 yen. The company’s U.S. sales fell 33 percent in May, better than the 37 percent decline analysts expected.

Market share for Asian automakers slid to 45.6 percent last month, down 2.5 percentage points from a year earlier, according to Autodata Corp. It was the first drop since September 2008.

Woori Finance, South Korea’s largest financial company, dropped 5.6 percent to 10,800 won. Spokesman Song Seung Hyun said yesterday the company is looking at ways to raise capital, including a sale of new shares.

Share Sales

KB Financial Group Inc., which controls South Korea’s biggest bank, fell 3.5 percent to 41,500 won after spokesman Choi In Seok said the company is considering selling shares, among various measures for raising capital.

“Share sales raise concerns among existing shareholders about dilution of their stock value,” said Kim Joo Hyoung, who helps manage the equivalent of $324 million in equities at KTB Asset Management Co. in Seoul. “The companies are seeking to raise capital while the markets are relatively better.”

The rally drove the average valuation of companies on MSCI’s Asian index to 1.4 times the book value of assets on May 29, an increase of 17 percent from the end of 2008. Developing- nation stock funds attracted $12 billion of assets in the four weeks through May 27, according to EPFR Global, which tracks investment flows worldwide.

In Taipei, Prince Housing fell 6.9 percent to NT$17.50, while China Metal plunged 7 percent to NT$37.5.

The companies will cooperate in the investigations, they said in separate stock exchange filings yesterday, without giving details of the probes. The Taiex Index lost 0.9 percent today, paring its advance in the past three months to 55 percent.

“Prince Housing and China Metal were searched by prosecutors yesterday and investors are using this as an excuse to take a breather,” said Sam Hsieh, a Taipei-based fund manager at Fuh Hwa Investment Trust Co., who helps oversee the equivalent of $4.8 billion.