Asian Stocks Rise on Growth Optimism; Mitsubishi Electric Gains

June 25 (Bloomberg) -- Asian stocks rose, led by mining and technology companies, as the U.S. Federal Reserve said the pace of economic contraction is slowing and South Korea raised its gross domestic product forecast.

Komatsu Ltd., an earthmoving equipment maker that gets a quarter of its sales from the Americas, added 3.5 percent in Tokyo as orders for U.S. durable goods unexpectedly increased. Rio Tinto Ltd., the world’s third-biggest mining company, climbed 3.3 percent in Sydney after metals prices gained. Mitsubishi Electric Corp. surged 7.2 percent after the Nikkei newspaper reported the company is planning to set up solar power manufacturing facilities in the U.S. and Europe.

The MSCI Asia Pacific Index rose 0.9 percent to 101.74 at 12:25 p.m. in Tokyo. Optimism government stimulus measures worldwide will revive the global economy has boosted the gauge by 44 percent from a more than five-year low on March 9.

“We’ve got out of the worst period thanks to those policy measures,” said Yoshihiro Ito, senior strategist at Okasan Asset Management Co., which oversees about $7.7 billion. “I still believe the global economy will start to recover in the second half.”

Japan’s Nikkei 225 Stock Average advanced 1.7 percent to 9,754.33. Kubota Corp. and Iseki & Co. climbed more than 4 percent after the Nikkei newspaper said the makers of farm equipment are seeking a greater presence in China.

South Korea’s Kospi Index gained 2.3 percent as the government said the economy will shrink 1.5 percent this year, less than an earlier forecast for a 2 percent contraction. Australia’s S&P/ASX 200 Index added 0.8 percent after the International Monetary Fund raised its 2009 and 2010 growth forecasts for the country’s economy.

Durable Goods

Futures on the Standard & Poor’s 500 Index added 0.2 percent. The gauge rose 0.7 percent in New York yesterday. U.S. orders for items meant to last several years increased 1.8 percent in May, a Commerce Department report showed. Economists had estimated a 0.9 percent drop.

Komatsu, which gets more than 80 percent of revenues supplying construction and mining equipment, added 3.5 percent to 1,480 yen. Honda Motor Co., which derives 45 percent of its sales in North America, gained 2.1 percent to 2,610 yen.

The durable goods report boosted speculation demand for resources will increase. A gauge of six metals in London climbed 4.8 percent yesterday, the most since March 19, while copper jumped 3.1 percent in New York.

Rio Tinto climbed 3.3 percent to A$51.20. BHP Billiton Ltd., the world’s biggest mining company, gained 1.5 percent to A$34.23. Mitsubishi Corp., which gets more than half of its profits from commodities, advanced 4.1 percent to 1,811 yen.

‘Glimmers of Hope’

“We’re getting glimmers of hope,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “The latest reports on consumer durables show consumers are becoming a bit more active and purchasing has returned to the marketplace.”

Financial markets have improved, the Fed said in a statement after a two-day meeting in Washington where it also kept the benchmark interest rate between zero and 0.25 percent. The Organization for Economic Cooperation and Development also lifted its forecast for growth in the economies of its 30 member nations yesterday for the first time in two years.

Optimism for an economic recovery had driven the average valuation of companies in the MSCI Asia Pacific Index to 1.5 times the net value of assets as of June 12, according to Bloomberg data. That was the highest level since Sept. 26. The gauge sank 3.5 percent last week, its first weekly drop in five.

Solar Power

Mitsubishi Electric surged 7.2 percent to 610 yen. The company plans to build plants for assembling solar power generation systems in Europe and the U.S. next fiscal year, the Nikkei newspaper reported, without citing anyone.

Samsung Electronics Co., the world’s biggest maker of liquid-crystal display televisions, added 1.7 percent to 590,000 won after a U.S. trade agency said some of the company’s products had been infringed by Sharp Corp. Some Sharp LCD televisions and computer monitors should be banned from the U.S., the country’s International Trade Commission said yesterday.

Harvey Norman Holdings Ltd., Australia’s No. 1 electronics retailer, climbed 3.8 percent to A$3.02. David Jones Ltd., the country’s second-largest department store chain, gained 1.5 percent to A$4.06.

The IMF said Australia’s economy will contract 0.5 percent this year, compared with a 1.4 percent decline estimated in April. The economy will grow 1.5 percent next year, the IMF said, after previously forecasting a 0.6 percent increase.

In Tokyo, Kubota rose 4.7 percent to 752 yen, while Iseki advanced 6.9 percent to 388 yen.

Kubota plans to increase production of combines and rice transplanters in China as government subsidies help to increase demand for the machines, the Nikkei reported, without saying where it obtained the information. Iseki has offered expertise to a Chinese farming equipment maker and will start producing harvesters there in August, according to the report.