Asian Stocks Rise as U.S. Takeovers, Buybacks Enhance Outlook; Rio Gains

Asian stocks rose, driving the regional benchmark index higher for the second day as U.S. takeovers, share buybacks and dividend prospects drove the Dow Jones Industrial Average to its highest close since June 2008.

Toyota Motor Corp., a Japanese automaker that earns about 70 percent of its revenue abroad, climbed 1.6 percent in Tokyo. Elpida Memory Inc. advanced 2.5 percent after Texas Instruments Inc., the largest analog chipmaker, reported higher profit. Rio Tinto Group, the world’s third-bigest mining company, gained 1.1 percent in Sydney as metal prices advanced.

The MSCI Asia Pacific Index rose 0.9 percent to 138.36 as of 11:11 a.m. in Tokyo, with about four stocks advancing for each that declined, and consumer and technology stocks leading gains. The gauge had its first weekly drop in 1 1/2 months last week amid concern faster-than-expected economic growth in China will add pressure on policy makers to accelerate efforts to tame inflation.

“This is the perfect time for consolidation,” said James Holt, who helps manage about $40 billion in Sydney at BlackRock Investment Management Australia) Ltd. “We expect that U.S. companies which undertook massive cost cutting during the global financial crisis will, as they regain confidence, deploy their record cash balances into mergers and acquisitions or new business investment.”

Japan’s Nikkei 225 Stock Average rose 0.9 percent and South Korea’s Kospi Index gained 0.8 percent. Australia’s S&P/ASX 200 Index advanced 0.6 percent and New Zealand’s NZX 50 Index increased 0.3 percent. Hong Kong’s Hang Seng Index advanced 0.6 percent. Shanghai Composite Index retreated 0.6 percent.

Futures on the Standard & Poor’s 500 Index were little changed today. The index increased 0.6 percent in New York yesterday and the Dow Jones climbed 0.9 percent to 11,980.52.

Valuations Slip

The MSCI Asia Pacific Index dropped 0.4 percent this year to yesterday, compared with gains of 2.6 percent for the S&P 500 and 2.2 percent for the Stoxx Europe 600 Index.

Stocks in the Asian benchmark were valued at 14.1 times estimated earnings on average at the last close, from 14.3 on June 30. Over the same period, shares in the S&P 500 have risen to 13.5 times estimated earnings from 12.7 times. Valuations for the Stoxx 600, at 11.2 times, are the same as they were at the end of the first half of 2010.

Intel Corp., the world’s largest chipmaker, gained after adding $10 billion to its share-buyback plan, Smurfit-Stone Container Corp. surged after agreeing to be acquired, and Warren Buffett’s Berkshire Hathaway Inc. advanced amid speculation the company may start paying a dividend this year.

Blue Chips ‘Targets’

Separately, Texas Instruments, the largest maker of analog chips, reported a 44 percent gain in fourth-quarter profit.

“International blue chips will likely be the main targets for investors to buy, leading gauges to further gains,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.

Toyota rose 1.6 percent to 3,470 yen in Tokyo and Canon Inc., the world’s largest camera maker, climbed 1.1 percent to 4,135 yen. Elpida advanced 2.5 percent to 1,162 yen, while in Seoul, Samsung Electronics Co., the world’s No. 1 maker of televisions, rose 0.6 percent to 977,000 won.

A measure of material stocks tracked by the Asia-Pacific gauge also climbed today, following metals prices higher.

Rio Tinto gained 1.1 percent to A$86.07 in Sydney, while BHP Billiton Ltd., the world’s largest mining company, rose 0.7 percent to A$45.21. Mitsubishi Corp., Japan’s No. 1 commodities trader, added 1 percent to 2,339 yen in Tokyo.

Copper prices gained for a second straight session on signs of rebounding demand in China, the world’s largest buyer, and a recovery in Europe, while tin reached a record. The London Metal Exchange Index of six metals including copper and aluminum gained 0.4 percent yesterday, rising for a second day.