Most Asian Stocks Rise; Funai Gains, National Australia Falls

July 23 (Bloomberg) -- Most Asian stocks rose, led by manufacturers that rely on U.S. demand as American housing prices unexpectedly gained. Financial companies declined after National Australia Bank Ltd. set the price for a share sale.

Funai Electric Co., which gets 71 percent of its revenue in North America, added 3.4 percent in Osaka. National Australia Bank, the nation’s top lender by assets, slumped 5.1 percent after pricing its stock sale at a discount. Woolworths Ltd., Australia’s biggest retailer, sank 2.8 percent as Royal Bank of Scotland Group Plc downgraded the stock on valuations.

“The sentiment is one of cautious optimism,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State, which holds about $110 billion. “The economy and markets are not likely to continue to recover in a straight line. There are going to be ebbs and flows.”

Almost five stocks gained for every three that declined on the MSCI Asia Pacific Index, which added 0.2 percent to 106.86 as of 11:53 a.m. in Tokyo. The gauge has gained 9 percent in the past eight days, the longest winning streak since January.

Hong Kong’s Hang Seng Index climbed 2.2 percent. Japan’s Nikkei 225 Stock Average added 0.1 percent, while Australia’s S&P/ASX 200 Index lost 0.2 percent.

South Korea’s Kospi Index dropped 0.3 percent. STX Pan Ocean Co., the country’s biggest bulk carrier, lost 1.3 percent after shipping fees slid for a third day.

Futures on the U.S. Standard & Poor’s 500 Index gained 0.3 percent. The gauge was little changed yesterday.

U.S. Housing

Average U.S. home prices rose 0.9 percent in May from April, the Federal Housing Finance Agency said yesterday. Prices were estimated to drop 0.2 percent, according to an economist survey.

Funai climbed 3.4 percent to 3,990 yen in Osaka trading. James Hardie Industries NV, the biggest seller of home siding in the U.S., rose 2.1 percent to A$4.85 in Sydney. Toyota Motor Corp., the world’s biggest automaker by market value, added 1.7 percent to 3,660 yen.

“Housing is no longer the drag on the market that kept pulling everything down,” said Mitsushige Akino, who oversees the equivalent of $522 million at Ichiyoshi Investment Management Co. in Tokyo. “Volumes remain light though, so shares are likely to remain range-bound until we can get some new sense of direction.”

National Australia Bank slumped 5.1 percent to A$22.39. The bank said it will sell shares at A$21.50 each ($18), a discount of 8.8 percent from the previous closing price. Rival Suncorp- Metway Ltd. lost 1.5 percent to A$6.80 and Bank of Queensland Ltd. slid 1.6 percent to A$10.33.

Broker Downgrade

Woolworths slumped 2.8 percent to A$26.80. Royal Bank of Scotland Group Plc slashed the rating on the stock to “hold” from “buy,” citing valuations.

The MSCI Asia Pacific Index’s eight-day rally has come amid better-than-expected earnings from U.S. companies including Apple Inc. and International Business Machines Corp. Shares in the gauge are valued at 24 times estimated net income, near the highest in almost four months.

“The market has really run ahead of itself in the last week or so,” Arjuna Mahendran, Singapore-based chief investment strategist for Asia at HSBC Private Bank, which oversees $494 billion in assets, said on Bloomberg Television. “We have reasonable optimism that the spate of above-expectation earnings that have been coming out will continue.”

STX dropped 1.3 percent to 11,650 won, while Korea Line Corp., South Korea’s No. 2 shipping line, sank 2.9 percent to 60,300 won. The Baltic Dry Index, a measure of shipping costs for commodities, slid 1.4 percent in London yesterday, bringing its three-day slump to 3.8 percent.

Oil Prices

Inpex Corp., Japan’s top oil explorer, sank 2.1 percent to 714,000 yen, while closest domestic rival Japan Petroleum Exploration Co. fell 2.5 percent to 4,650 yen. Mitsui & Co., a trading company that gets more than half its profit from commodities, sagged 1.6 percent to 1,121 yen.

Crude oil futures in New York dropped as much as 0.6 percent in electronic trading today, extending yesterday’s 0.3 percent decline.

Disco Corp., a Japanese maker of precision machinery, rose 3.6 percent to 4,330 yen. First-quarter revenue jumped 42 percent from the previous three months as demand recovered, the company said yesterday in a preliminary report.