Asian Stocks Rise on Australian GDP; Aussie, Oil Gain By Richard Frost - Jun 5, 2012

Asian stocks gained for a second day while the Australian dollar and oil advanced after the southern country’s economy expanded at twice the rate economists estimated and the U.S. services-industry unexpectedly grew. Aluminum rose as metals in London traded for the first time this week.

The MSCI Asia Pacific Index (MXAP) added 0.6 percent at 10:56 a.m. in Tokyo. The Nikkei 225 Stock Average climbed 0.7 percent. Standard & Poor’s 500 Index futures advanced 0.4 percent. The so-called Aussie strengthened 1.1 percent against the U.S. dollar, poised for the biggest gain in almost two months, after a report showed the nation’s economy grew 1.3 percent last quarter. Oil rose 0.6 percent in New York. Aluminum increased 0.6 percent following a two-day holiday in the U.K.

Australia’s gross domestic product advanced 1.3 percent from the previous three months, a Bureau of Statistics report showed, compared with the median 0.6 percent gain predicted by economists in a Bloomberg News survey. U.S. service industries sustained their pace of growth in May, showing the biggest part of the U.S. economy is withstanding the impact of the European debt crisis.

The Group of Seven nations yesterday agreed to coordinate their response to Europe’s turmoil, which has tipped at least eight of the 17 euro-area economies into recession and damped European demand for foreign goods. European representatives “said they will speed up their efforts to resolve those problems, which was encouraging to us,” Japanese Finance Minister Jun Azumi told reporters in Tokyo.

Stock Valuations

The MSCI Asia Pacific Index trades at 11.2 times its companies’ estimated earnings, the lowest valuation since October 2008, weekly data compiled by Bloomberg show. The gauge plunged 15 percent from a six-month high in February through June 4 as U.S. economic data trailed estimates and concern grew about Greece’s future in the euro and Spain’s deteriorating national finances.

The Institute for Supply Management’s index of non- manufacturing businesses, which covers about 90 percent of the economy, unexpectedly increased to 53.7, topping the median projection of economists for a reading of 53.4.

Spain may receive a precautionary credit line from the European Financial Stability Facility, Germany’s Die Welt newspaper reported in a preview of a story that will run today, citing unidentified people familiar with talks about the possible option.

Commerzbank AG, Germany’s second-largest bank, had its credit rating cut one level today as Europe’s debt crisis prompted Moody’s Investors Service to downgrade seven lenders in the nation and three in Austria. Commerzbank, based in Frankfurt, was reduced to A3 from A2, Moody’s said in a statement. A review of Deutsche Bank AG, the nation’s largest lender, will be concluded later, Moody’s said.

To contact the reporter on this story: Richard Frost in Hong Kong at rfrost4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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