June 24 (Bloomberg) -- Asian stocks rose, with the region’s key index snapping seven straight weeks of declines, amid speculation China may not take further steps to cool its economy, and on diminishing concern that Europe’s debt crisis will hurt bank earnings.
Aluminum Corp. of China Ltd. gained 2.9 percent in Hong Kong. Mizuho Financial Group Inc., Japan’s third-largest bank by market value, rose 1.6 percent in Tokyo after European Union leaders vowed to rescue Greece from default. Sony Corp., Japan’s No. 1 exporter of consumer electronics, which receives more than 20 percent of sales from Europe, advanced 2.4 percent. Qantas Airways Ltd., Australia’s biggest airline, climbed 1.9 percent in Sydney after oil prices slid 4.6 percent in New York yesterday. Oil producer Woodside Petroleum Ltd. sank 0.5 percent.
“The high oil price was a massive constraint on a fragile recovery, so anything that takes the froth off the energy market is positive for growth,” said Nader Naeimi, a Sydney-based strategist for AMP Capital Investors Ltd., which has almost $100 billion under management. “With Greece, they’ve managed to kick the can further down the road, but any progress in avoiding contagion to the rest of Europe is going to be welcomed.”
The MSCI Asia Pacific Index gained 1.4 percent to 132.48 as of 7:26 p.m. in Tokyo, putting the gauge on course for a 2.2 percent weekly advance, the most since the period ended April 22. More than three stocks rose for each that fell on the index, which has dropped in the previous seven weeks. The index has tumbled 5.9 percent from this year’s May 2 high amid mounting concern about a slowing U.S. economy, Europe’s sovereign debt crisis and China’s steps to curb inflation.
Australia’s S&P/ASX 200 Index climbed 0.2 percent, while South Korea’s Kospi Index gained 1.7 percent. Hong Kong’s Hang Seng Index advanced 1.9 percent.
China’s Shanghai Composite Index surged 2.2 percent, the most in four months, after China’s Premier Wen Jiabao said efforts to stem inflation have worked, easing concern the government will raise interest rates.
Japan’s Nikkei 225 Stock Average advanced 0.9 percent. Foreign investors were net sellers of Japanese stocks last week, offloading 142.8 billion yen ($1.7 billion) more shares than they bought, the most since the week ended Aug. 27, according to the Tokyo Stock Exchange.
All 10 industry groups tracked by the Asia Pacific gauge, advanced today, led by financial stocks.
Aluminum Corp. gained 2.9 percent to HK$6.43 in Hong Kong. BHP Billiton Ltd., the world’s No. 1 mining company whose biggest customer is China, climbed 0.7 percent to A$42.34.
“There is concern as to whether China can rein in inflation and sustain its rapid development -- my answer is an emphatic yes,” Wen wrote in an opinion piece in the Financial Times newspaper. “China has made capping price rises the priority of macroeconomic regulation and introduced a host of targeted policies. These have worked. The overall price level is within a controllable range and is expected to drop steadily.”
Mizuho Financial rose 1.6 percent to 128 yen in Tokyo, while in Sydney, Commonwealth Bank of Australia, the nation’s largest lender by market value, added 1.3 percent to A$51.13. National Australia Bank Ltd. climbed 0.8 percent to A$24.66.
Sony gained 2.4 percent to 2,077 yen in Tokyo. Samsung Electronics Co., which also gets more than 20 percent of its revenue from Europe, rose 2.5 percent to 852,000 won in Seoul.
Major stock indexes across Asia climbed after European Union leaders pledged to stabilize the euro-area economy, vowing to stave off a Greek default as long as the country’s parliament votes in favor of 78 billion euros ($111 billion) of budget cuts next week.
‘Less Contagion Chance’
Europe’s latest attempt to stem the debt crisis came after bonds of debt-strapped euro nations slumped and officials in the U.S. and China warned that the euro area’s failure to restore confidence threatened the world economy.
“The fact that Europe is coming to the aid of Greece is a positive for the market,“ said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “It means there’s less of chance that the crisis spills over into neighboring countries.”
Qantas climbed 1.9 percent to A$1.835 in Sydney on the prospect of lower fuel prices. Cathay Pacific Airways Ltd., Hong Kong’s largest carrier, advanced 5.3 percent to HK$17.80.
Air China Ltd., the world’s biggest carrier by market capitalization, jumped 7.8 percent to HK$7.76. China Airlines Ltd., Taiwan’s biggest airline, gained 3.5 percent to NT$19.05.
‘Airlines Face Challenges’
“In the short-term, oil prices falling alone is a positive factor for airlines,” said Danny Yan, a fund manager at Haitong International Asset Management, which oversees $600 million. “However, airlines still face challenges. The decision to increase oil supply is only temporary.”
Futures on the Standard & Poor’s 500 Index advanced 0.3 percent today. In New York, the index declined 0.3 percent yesterday after European Central Bank President Jean-Claude Trichet said risk signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks. A bigger-than-estimated increase in U.S. jobless claims added to signs the world’s biggest economy is slowing.
U.S. stocks also retreated after purchases of new homes fell in May for the first time in three months, showing the industry is struggling to gain momentum. Federal Reserve Chairman Ben S. Bernanke said this week that a jobless rate above 9 percent and weakness in housing show the economy may be facing stronger “headwinds” than Fed policy makers initially estimated.
The MSCI Asia Pacific Index lost 5.1 percent this year through yesterday, compared with a gain of 2.1 percent by the S&P 500 and a drop of 4.2 percent the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.3 times estimated earnings on average, compared with 13 times for the S&P 500 and 10.7 times for the Stoxx 600.
Woodside Petroleum lost 0.5 percent to A$40.20 in Sydney, while rival Santos Ltd. dropped 0.8 percent to A$13.27. Chinese offshore producer Cnooc Ltd. sank 1 percent to HK$17.86 in Hong Kong.
Crude oil for August delivery tumbled 4.6 percent to $91.02 a barrel in New York yesterday, the lowest settlement since Feb. 18, after the International Energy Agency announced that it will release emergency stockpiles to ease possible shortages. It is the third time the Paris-based agency has coordinated the use of emergency stockpiles since its 1974 foundation.
--With assistance from Akiko Ikeda and Toshiro Hasegawa in Tokyo. Editors: John McCluskey, Nick Gentle.
To contact the reporters on this story: Shani Raja in Sydney at firstname.lastname@example.org. Toshiro Hasegawa in Tokyo at email@example.com.
To contact the editor responsible for this story: Nick Gentle at firstname.lastname@example.org.