Bloomberg News

Asian Stocks Advance as Greek Parliament Approves Budget Cuts

February 14, 2012

Feb. 13 (Bloomberg) -- Asian stocks climbed, extending the longest run of weekly gains since 2005, after Greece’s parliament approved austerity measures to help secure a second debt bailout.

Fortescue Metals Group Ltd. rallied 5 percent in Sydney as metal prices advanced and a report said Teck Resources Ltd. bought a stake in the iron-ore producer. Tokyo Electric Power Co. climbed as the company received government aid. Chinese and Hong Kong stocks rose after Premier Wen Jiabao said the nation needs to start “fine-tuning” economic policy this quarter amid signs growth is slowing.

The MSCI Asia Pacific Index rose 0.6 percent to 125.65 as of 7:56 p.m. in Tokyo, after falling 1.4 percent on Feb. 10. Japan’s Nikkei 225 Stock Average gained 0.6 percent and Australia’s S&P/ASX 200 Index rose 0.9 percent. Hong Kong’s Hang Seng Index increased 0.5 percent while South Korea’s Kospi Index advanced 0.6 percent.

“I can certainly see the value in the market,” said Simon Bonouvrie, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “With Greece’s austerity measures just being passed, it will counteract declines” from last week.

Futures on the Standard & Poor’s 500 Index rose 0.6 percent, indicating the gauge may rebound from its first weekly fall in six. The gauge slipped 0.7 percent at the end of last week amid concern plans to help Greece avoid default were unraveling.

Greek Vote

Greek Prime Minister Papademos won parliamentary approval for austerity measures to secure a 130 billion euro ($172 billion) international bailout as rioters protesting the cuts battled police and set fire to buildings in Athens.

Passage of the austerity bill puts the spotlight on a meeting of euro-region finance ministers on Feb. 15 that must decide whether to approve the second aid package. Resolution of the negotiations, which started in July, would help contain the threat that speculators will target debt-saddled nations, including Italy and Portugal.

Fortescue led mining share higher today, rallying 5 percent to A$5.50 in Sydney trading as base metals advanced in London and the Australian Financial Review reported Teck Resources may have bought a 2.89 percent stake in the iron ore producer for A$480 million. The newspaper cited unidentified people.

BHP Billiton Ltd., the world’s largest mining company, increased 1 percent to A$36.66, Rio Tinto Group gained 0.6 percent to A$70.43 and Aluminum Corp. of China Ltd. advanced 0.5 percent to HK$4.19.

Tokyo Electric

Tokyo Electric gained 0.5 percent to 201 yen. The shares rallied as much as 8 percent after Japan’s government agreed to give $8.9 billion to support compensation payments for the Fukushima nuclear disaster, averting the risk the utility will have its stock delisted.

Nitto Denko Corp. jumped 3.8 percent to 3,150 yen in Tokyo after Nomura Holdings Inc. raised its recommendation for the shares to “buy” from “neutral.”

Chinese banks rose after reported comments by Premier Wen comments sparked speculation the government may further ease monetary policy. Economic circumstances in the first quarter deserve attention, Wen told business executives last week in Beijing, the official Xinhua News Agency reported yesterday.

Among shares that fell, China Resources Land Ltd., a property developer, dropped 5.8 percent to HK$14.02. The shares slipped after new lending in China missed estimates in January and the eastern city of Wuhu backtracked on proposals to ease real-estate market controls.

Stocks in the MSCI Asia Pacific Index are valued at 14.1 times estimated earnings on average, compared with 12.8 times for the S&P 500 and 10.9 times for the Stoxx Europe 600 Index.

--Editors: John McCluskey, Jason Clenfield

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

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


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