Asian stocks advanced, led by financial companies, as government efforts to bolster financial markets lowered banks' borrowing costs.
Shinhan Financial Group Ltd., South Korea's second-largest financial company, rose 3.3 percent, snapping a three-day slump. BHP Billiton Ltd., Australia's biggest oil producer, climbed 5.1 percent on speculation the Organization of Petroleum Exporting Countries will reduce output targets at its meeting this week to support prices. Panasonic Corp. jumped 6.9 percent after the Nikkei newspaper said profit will exceed the company's estimate.
``We can expect to see a significant stabilization of the financial markets by the end of this month or the beginning of the next,'' said Kim Young Il, who oversees the equivalent of $6.5 billion as head of equities at Korea Investment Trust Management Co. in Seoul. ``But it will take time for the real economy to improve, and that means investor sentiment won't immediately show a turn for the better.''
The MSCI Asia Pacific Index rose 0.9 percent to 88.11 as of 10:51 a.m. in Tokyo. The gauge is still down 44 percent for the year, set for its worst annual performance since the benchmark was created in 1987. Japan's Nikkei 225 Stock Average added 0.9 percent to 8,772.55. Equity benchmarks advanced in Australia, Hong Kong, Singapore and New Zealand.
U.S. stocks slipped on Oct. 17, with the Standard & Poor's 500 Index losing 0.6 percent. New home construction fell to the lowest in a quarter century, while consumer confidence dropped the most on record, sending shares lower.
South Korea Bailout
Shinhan jumped 4.3 percent to 35,150 won. Woori Finance Holdings Co., which control's South Korea's second-largest bank, advanced 3 percent to 10,250 won. KB Financial Group Inc., the holding company for Kookmin Bank, added 2.9 percent to 39,100 won.
South Korea's government moved yesterday to rescue its financial system by guaranteeing $100 billion of lenders' foreign-currency debts and providing $30 billion in U.S. dollars to banks. The government will also provide tax benefits for long-term equity investors.
The measures came after governments in the U.S. and Europe pledged $2 trillion to rescue financial companies and governments guaranteed bank deposits.
BHP rose 5.9 percent to A$26.05, the first gain in four days. Woodside Petroleum Ltd., Australia's No. 2 oil producer, jumped 4.2 percent to A$37.50. Marubeni Corp., a Japanese trading house that generates more than a quarter of its revenue from energy, climbed 3.6 percent to 400 yen.
Panasonic, the world's largest maker of consumer electronics, gained 6.7 percent to 1,600 yen after the Nikkei newspaper said operating profit for the six months ended in September may beat the company's own estimate by more than 20 billion yen ($197 million).
Cheap Shares
Nippon Steel Corp. rose 5.1 percent to 332 yen. JFE Holdings Inc. surged 7.9 percent to 2,400 yen. Japan's two largest steelmakers are likely to boost profit forecasts for the year ending in March as materials costs decline and steel prices remain high, the Nikkei said.
Nissan Motor Co. climbed 5.4 percent to 510 yen, while minicar maker Daihatsu Motor Co. rose 3.8 percent after UBS AG lifted both companies to ``buy,'' calling the shares cheap.
Shares in the MSCI AC Asia Pacific Consumer Discretionary Index traded at 0.98 times book value, the cheapest level among all 10 industry groups included in the Asian benchmark.
``Company earnings may not be as bad as we feared,'' said Ryuta Otsuka, a strategist at Toyo Securities Co. in Tokyo. ``The recent declines in the stock market have already priced in possible negative results.''
Mirae Asset Securities Co., South Korea's biggest brokerage by market value, lost 15 percent to 69,700 won after JPMorgan Chase & Co. cut its recommendation on the stock to ``underweight.''
