Asian Stocks Rise for Third Week on Commodities, Profit Outlook

July 24 (Bloomberg) -- Asian stocks rose for a third week as commodity prices gained and as U.S. companies reported or raised profit forecasts, boosting confidence in the strength of global economic growth.

BHP Billiton Ltd., the world’s largest mining company, climbed 4 percent this week in Sydney. Hon Hai Precision Industry Co., the world’s largest electronics contract manufacturer, gained 3.7 percent in Taipei after Microsoft Corp. reported positive earnings in the U.S. China Resources Land Ltd., a state-controlled developer, soared 6.4 percent in Hong Kong on speculation China may ease tightening measures.

The MSCI Asia Pacific Index climbed 1.0 percent, advancing for a third-straight week and posting the longest winning streak since the week ended April 16. The gauge has slumped 8.5 percent from its high this year on April 15 on concern Europe’s debt crisis and Chinese steps to curb property prices will slow global growth.

“Sentiment has been improving after the better-than- expected U.S. earnings eased investors’ concerns about a poor economic outlook,” said Michiya Tomita, a Hong Kong-based fund manager for Mitsubishi UFJ Asset Management Co., which oversees $64 billion.

Hong Kong’s Hang Seng Index rose 2.8 percent this week as the city’s developers gained on prospects of higher property prices. China’s Shanghai Composite Index climbed 6.1 percent. South Korea’s Kospi Index increased 1.1 percent. Australia’s S&P/ASX 200 Index rose 0.8 percent, led by materials companies. Japan’s Nikkei 225 Stock Average advanced 0.2 percent in a four- day, holiday-shortened week.

Materials Stocks Advance

A gauge of material companies gained the most this week among the 10 industry groups in the MSCI Asia Pacific Index, followed by energy companies.

BHP Billiton climbed 4 percent to A$39.68 this week in Sydney, while Rio Tinto Group, the world’s third-biggest mining company, jumped 6.2 percent to A$69.86. Sumitomo Metal Mining Co., Japan’s largest nickel producer, climbed 4.8 percent to 1,130 yen in Tokyo. Aluminum Corp. of China Ltd., the nation’s biggest producer of the metal, surged 7 percent to HK$6.59 in Hong Kong.

The London Metals Exchange Index, a measure of six metals, rose 7.0 percent this week, while copper futures for September delivery jumped 8.7 percent in New York after a report showed sales of previously owned U.S. homes fell less than forecast in June, bolstering the demand outlook for the metal. Crude oil for September delivery climbed 3.2 percent.

Hon Hai Increases

Microsoft, the world’s largest software maker, reported on July 22 a 48 percent climb in fourth-quarter net income, exceeding the average analyst estimate in a Bloomberg survey. Separately, California-based company Apple Inc. forecast fourth- quarter sales that topped analysts’ estimates.

“Microsoft’s earnings reiterated that demand for electronics in the second half is still positive,” said Monika Yang, who helps oversee $2 billion at Hamon Asset Management Ltd. in Hong Kong. “This is a boost to Asian stock sentiment as it stops the earlier noises about possible weak demand.”

Hon Hai Precision Industry gained 3.7 percent to NT$125 this week in Taipei. Samsung Electronics Co., Asia’s biggest maker of computer chips, flat screens and mobile phones, increased 1.1 percent to 811,000 won in Seoul. James Hardie Industries SE, the biggest seller of home siding in the U.S., gained 2.6 percent to A$6.37 in Sydney.

China Policy Speculation

Property developers rose this week on speculation China’s government will soon end policies to cool the housing market. Donald Straszheim, a senior managing director for China research at International Strategy & Investment Group, said China will “back away” from its tightening policies in the housing market within three months as the economy faces a bigger risk from a slowdown than inflation.

China Resources Land jumped 6.4 percent to HK$16.62 in Hong Kong. Guangzhou R&F Properties Co., the biggest real-estate company in the southern Chinese city, surged 13 percent to HK$12.34. China Vanke Co., the country’s largest listed developer, climbed 11 percent to 9.86 yuan in the southern city of Shenzhen.

“What the market is betting now is that the government will allow the current tightening measures to be relaxed going forward,” said Sun Chao, an analyst at Citic Securities Co. in Shanghai.