Asia Stocks, Won, Metals Gain on Europe Outlook; Yen Strengthens

AppId is over the quota
AppId is over the quota
October 07, 2011, 2:01 AM EDT By Shiyin Chen

Oct. 7 (Bloomberg) -- Asia stocks rallied for a second day, while the South Korean won and metals climbed amid efforts by European policy makers to contain the region’s debt crisis. The euro headed for a weekly gain against the dollar.

The MSCI Asia Pacific Index added 2.2 percent at 2:37 p.m. in Tokyo. Standard & Poor’s 500 Index futures lost 0.1 percent before data on U.S. unemployment. The won appreciated 1.1 percent. The euro was little changed at $1.3432 and has gained 0.3 percent this week. Copper and zinc advanced at least 1 percent in London. Oil added 0.1 percent in New York, following the biggest two-day jump in seven months.

European Central Bank President Jean-Claude Trichet said yesterday the ECB will resume covered-bond purchases and reintroduce yearlong loans for banks. German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet in Berlin on Oct. 9 over Greece’s debt problems as the nation edges closer to default. U.S. data today may show gains in non-farm payrolls last month failed to dent the 9.1 percent unemployment rate, economists surveyed by Bloomberg News said.

“There is a little bit of light at the end of the tunnel,” Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management, said in a Bloomberg Television interview. “The Europeans are talking more aggressively, albeit sometimes contradictorily, about recapitalizing the banks. The question is how they will do that, but at least they’re admitting there’s a problem there.”

Samsung, Rio

More than three stocks advanced for each one that fell in the MSCI Asia Pacific Index, helping the gauge erase its weekly loss. Japan’s Nikkei 225 Stock Average rose 1 percent, Australia’s S&P/ASX Index jumped 2.3 percent, South Korea’s Kospi Index rallied 2.7 percent and Hong Kong’s Hang Seng Index increased 3 percent.

Hutchison Whampoa Ltd., which owns ports in Germany and Spain, surged 10 percent in Hong Kong after saying its operations in Europe are “very resilient.”

Mining companies rallied, led by a 4.9 percent jump in Rio Tinto Group. Rio and its partner Ivanhoe Mines Ltd. said the Mongolian government will stick with their agreement on the $10 billion Oyu Tolgoi copper project, halting a proposal by the Asian nation to increase its holding.

The S&P 500 jumped 1.8 percent yesterday, rounding off a three-day, 6 percent gain. Shares climbed yesterday after Labor Department figures showed applications for jobless benefits increased by 6,000 in the week ended Oct. 1 to 401,000, lower than the 410,000 median forecast by economists surveyed by Bloomberg News.

U.S. Payrolls

A separate report today may show employment climbed by 55,000 workers last month, after no change in August, according to the median forecast of 91 economists surveyed by Bloomberg News. The jobless rate will hold at 9.1 percent for a third month, according to the survey median. Yields on 10-year Treasuries were little changed at 1.99 percent.

The euro traded at 102.88 yen from 103.09 yesterday, when it gained 0.6 percent. Japan’s currency climbed 0.2 percent to 76.60 versus the dollar. The Bank of Japan held off today from adding more monetary stimulus as it studied whether the yen near a post-World War II high and slowing growth abroad were damping the economy’s recovery.

Trichet, overseeing his final ECB monetary-policy decision before retiring, said at a Berlin press conference yesterday that the central bank will spend 40 billion euros ($54 billion) on covered bonds starting next month and will offer banks two additional unlimited loans of 12 and 13-month durations. He also said the ECB will continue to lend banks as much money as they need in its regular refinancing operations at least until July 2012.

Won, Ringgit

“The sentiment is better now because European leaders have actually admitted that there is a fire that needs to be controlled,” Erik Ristuben, New York-based chief investment officer at Russell Investments, said in a Bloomberg Television interview. “There are a lot of potential things that can go wrong, but it’s not as likely, as things begin to work themselves out in a grinding fashion.”

The won strengthened to 1,178.60 per dollar, set for its biggest gain since Sept. 27. Malaysia’s ringgit appreciated for a fourth day, climbing 0.6 percent to 3.1585 after government figures showed August exports rose 10.9 percent, beating the median forecast of economists in Bloomberg News survey.

Taiwan’s dollar rose 0.3 percent to NT$30.524. Data today may show export growth accelerated to 9.6 percent in September from 7.2 percent the previous month, according to economists surveyed by Bloomberg.

Credit Risk

The cost of insuring Asia-Pacific corporate and sovereign bonds against non-payment fell, with the Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan dropping 14 basis points to 239, Credit Agricole SA prices show. That will be the gauge’s third consecutive decline after reaching a two- year high on Oct. 4, according to CMA, which is owned by CME Group Inc.

Oil for November delivery rose to $82.62 a barrel on the New York Mercantile Exchange following a two-day 9.1 percent jump that was the biggest increase since February. Prices fell as much as 0.6 percent after tanker-tracker Oil Movements said the Organization of Petroleum Exporting Countries will keep crude-shipment levels unchanged through most of this month as the economic slump constrains demand.

Three-month copper added 1.1 percent to $7,302.75 a metric ton on the London Metal Exchange. Zinc increased 1.3 percent to $1,890.50 a ton and lead climbed 1.6 percent to $1,952.50 a ton.

--With assistance from Linzie Janis in London, Susan Li and Paul Gordon in Hong Kong, and Monami Yui and Yusuke Miyazawa in Tokyo. Editors: Darren Boey, Richard Frost

To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net.

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net.

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