Bloomberg News

Most Asian Stocks Rise as Wen Comments Spur Bets on China Easing

October 26, 2011

Oct. 26 (Bloomberg) -- Most Asian stocks rose as speculation China may begin easing monetary policy tempered uncertainty about the outcome of European debt-crisis talks.

Country Garden Holdings Co., a real estate developer, rose 3.6 percent in Hong Kong. Honda Motor Co., Japan’s second largest carmaker by market value, fell 0.6 percent. Aluminum Corp. of China Ltd., the nation’s biggest producer of the metal, rallied 3.9 percent after profit increased. Newcrest Mining Ltd., Australia’s biggest gold producer, rose 3.5 percent as gold futures gained.

About five stocks rose for every four that fell on the MSCI Asia Pacific Index, which decreased by 0.01 point, or less than 0.1 percent, to 119.34 as of 9:28 p.m. in Tokyo. The measure pared an earlier drop of as much as 1.1 percent amid concern European leaders will fail to create a durable solution to the region’s sovereign-debt crisis. Six out of 10 industry groups on the gauge retreated.

“If China’s premier now sounds more dovish and is likely to do some sort of easing, that will add to confidence China will avoid hard landing,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “That’s exactly what investors wanted to hear.”

Chinese Premier Wen Jiabao said that economic policy will be fine-tuned as needed and the industry ministry said it is studying “stimulative policies” for smaller companies as a global slowdown threatens growth.

Officials will make adjustments at a “suitable time and by an appropriate degree,” Wen said in a statement published late yesterday. The Ministry of Industry and Information Technology and other government agencies will work to help small businesses facing difficulties, it said separately in a statement today.

Europe Indecision

Country Garden advanced 3.6 percent to HK$2.86 in Hong Kong. China Minsheng Banking Corp., a commercial bank, gained 5 percent to HK$6.48.

Stocks fell earlier after the cancellation of a meeting of European Union finance ministers spurred concern that the region’s leaders will fail to agree on how to tame the sovereign-debt crisis. European leaders will hold a summit today in Brussels as they seek to bolster a rescue fund, recapitalize banks and provide debt relief to Greece.

Japan’s Nikkei 225 Stock Average fell 0.2 percent, paring a loss of as much as 1.4 percent. South Korea’s Kospi Index added 0.3 percent. Australia’s S&P/ASX 200 rose 0.4 percent, reversing an earlier loss of as much as 1.3 percent after a report showed inflation slowed last quarter.

Hong Kong’s Hang Seng Index rose 0.5 percent.

Exporters Fall

Asian exporters fell. Honda Motor Co., Japan’s second largest carmaker by market value, fell 0.6 percent to 2,329 yen. Samsung Electronics Co., South Korea’s biggest exporter of consumer electronics, retreated 1.2 percent to 934,000 won.

The MSCI Asia Pacific Index declined 13 percent this year through yesterday, compared with a 2.3 percent loss by the S&P 500 and a 13 percent drop by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.1 times estimated earnings on average, compared with 12.4 times for the S&P 500 and 10.3 times for the Stoxx 600.

Aluminum Corp. advanced 3.9 percent to HK$4.05 in Hong Kong after saying it turned to profit in the third quarter.

Gold producers advanced as futures on the precious metal extended a 2.9 percent advance in New York yesterday. Newcrest Mining rose 3.5 percent to A$34.40. Rival St. Barbara Ltd. added 2.3 percent to A$2.23.

Gold futures settled at $1,700.40 on the Comex in New York, after touching $1,704.70, the highest for a most-active contract since Sept. 23.

Olympus Corp., the maker of endoscopes that has lost more than half its market value amid a scandal involving $687 million in payments to advisers, dropped 7.6 percent to 1,099 yen after being placed on margin trading watch list by the Tokyo Stock Exchange. The exchange will report margin positions on the stock daily rather than weekly.

--With assistance from Toshiro Hasegawa in Tokyo. Editors: Nick Gentle, Jason Clenfield

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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


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