Commodity Producers Boosted Asian Stock Market

Commodity producers as a forecast for faster European economic growth boosted confidence in a global recovery. Japanese shares fell on concern the yen trading near a 15-year high against dollar will erode the nation?s export earnings.

BHP Billiton Ltd., the world?s largest mining company, climbed 1.3 percent in Sydney after commodity prices increased. Toyota Motor Corp. lost 1.7 percent in Tokyo on speculation the nation?s Prime Minister Naoto Kan would survive a leadership challenge from Ichiro Ozawa, who advocated intervention to weaken the yen. East Japan Railway Co. sank 2.4 percent after its investment rating was cut by Deutsche Bank AG. BHP gained 1.3 percent to A$39.05, the biggest contributor to the MSCI Asia Pacific Index?s advance. Mitsubishi Corp., Japan?s biggest trading company, advanced 1 percent to 1,902 yen in Tokyo. Jiangxi Copper Co., China?s No. 1 producer of the metal, rose 0.7 percent to HK$18.48 in Hong Kong.

MSCI Asia Pacific Index gained 0.2 percent to 124 as of 5:09 p.m. in Tokyo. About five stocks fell for every four that rose on the gauge, which earlier rose as much as 0.4 percent. The measure has climbed 7 percent from a one-month low on Aug. 25 amid speculation the U.S. will avoid slipping into its second recession in three years. A gauge of financial companies in the MSCI Asia Pacific Index that includes banks rose 0.4 percent. The finance index climbed 2 percent yesterday after regulators agreed following a meeting in Basel, Switzerland to more than double capital requirements for the world?s banks, while giving them as long as eight years to comply in full.

MSCI Asia Pacific Index tumbled as much as 16 percent from its high this year on April 15 as concerns intensified over the strength of global growth. It has rallied 14 percent since May 25, with gains accelerating in the past two weeks as U.S. data fueled optimism demand for Asian-made products will increase in the world?s largest economy. Stocks in the MSCI Asia Pacific Index trade at 14 times estimated earnings on average, compared with 13.4 times for the S&P 500 Index and 12 times for the Stoxx Europe 600 Index.

Japan?s Nikkei 225 Stock Average and South Korea?s Kospi index lost 0.2 percent. Australia?s S&P/ASX 200 Index advanced 0.3 percent. Hong Kong?s Hang Seng Index gained 0.2 percent.China?s Shanghai Composite Index closed little changed as Premier Wen Jiabao said the nation?s economy is in ?good shape? and the government will curb property market speculation.

Futures on the Standard & Poor?s 500 Index slipped 0.2 percent. The index climbed 1.1 percent yesterday in New York to the highest level in a month after China reported an increase in industrial production and the European Commission said Europe?s economy may grow almost twice as fast as previously forecast this year. Raw-material producers gained today after copper futures and crude-oil prices rose in New York yesterday boosted optimism that global economic growth will raise demand for commodities.

Gross domestic product in the 16-nation euro region may increase 1.7 percent this year instead of the 0.9 percent projected at the depth of Europe?s fiscal crisis in May, the Brussels-based commission said in a report published yesterday. Crude oil for October delivery climbed 1 percent to $77.19 a barrel yesterday in New York, the highest settlement price since Aug. 11. The London Metal Exchange Index of six metals including aluminum and copper jumped 1.8 percent yesterday, the first gain in three days.

Banks advanced for a second straight day as regulators gave them more time than analysts expected to comply with stiffer capital requirements aimed at preventing future financial crises. United Microelectronics Corp., the world?s second-biggest contract chipmaker, jumped 1.8 percent to NT$13.95. The Taiwan High Court upheld an acquittal of former Chairman Robert Tsao, the Central News Agency reported.

Mitsubishi UFJ Financial Group Inc., Japan?s biggest publicly traded bank, climbed 0.7 percent to 414 yen. In Hong Kong, HSBC Holdings Plc added 0.6 percent to HK$81.05, while Industrial & Commercial Bank of China Ltd. rose 1.5 percent to HK$5.93.

Banks in Asia have high capital ratios and will be able to avoid the degree of fundraising needed elsewhere to meet the new international standards, Zhu Min, a former deputy governor of China?s central bank and vice president of Bank of China Ltd., told Bloomberg Television yesterday.

Japanese automakers and consumer electronics companies fell as the yen strengthened on the prospect of Kan beating Ozawa in a vote by members of the ruling Democratic Party of Japan. Kan won the ballot, the results of which were announced after the stock market closed, sending the yen as high as 83.09 against the dollar. That?s the strongest level since May 1995. East Japan Railway, Japan?s biggest railway operator, lost 2.4 percent to 5,360 yen, its lowest level since April 2009 and the third-biggest drag on the MSCI Asia Pacific Index. The rail operator was cut to ?hold? from ?buy? at Deutsche Bank.

Toyota, the world?s largest carmaker, retreated 1.7 percent to 2,899 yen and was the heaviest drag on the MSCI Asia Pacific Index. Sony Corp., which receives 73 percent of its sales outside of Japan, lost 0.7 percent to 2,494 yen. Sharp Corp., which gets nearly half of its sales abroad, lost 0.8 percent to 828 yen. ?Current market trends will continue because there is likely to be no new economic policies that would reverse the yen?s appreciation,? said Norihiro Fujito, a strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo.