Most Asian Stocks Rise on China, India Growth Signs; Oil Falls

By Sandy Hendry and Shani Raja
Jan. 12 (Bloomberg) -- Most Asian stocks rose on signs China and India will help drive growth in the global economy.
Oil declined on forecasts cold weather in the U.S. will abate.
The MSCI Asia Pacific Index climbed as much as 0.4 percent to 126.16, the highest since Aug. 13, 2008, as of 5:30 p.m. in Tokyo. SAIC Motor Corp. led gains in China shares after the nation overtook the U.S. as the world’s biggest auto market.
Infosys Technologies Ltd., India’s No. 2 software exporter, climbed after raising its sales forecast. The Dow Jones Euro Stoxx 600 and futures on the Standard & Poor’s 500 Index were little changed at 8:30 a.m. London time.
Five stocks advanced for every four that declined on the Asian stock benchmark after reports showed China’s car sales climbed 46 percent in 2009 and India’s industrial output rose
11.7 percent in December from a year earlier. Shares of commodity producers fell after Alcoa Inc., the largest U.S.
aluminum maker and the first Dow Jones industrial to report fourth-quarter results, posted profit that trailed forecasts.
"Asia, especially China, will remain the world’s highest- growing region over the next few years on an increase in government spending and consumer demand," said Prapas Tonpibulsak, chief investment officer at Ayudhya Fund Management Pcl, which manages $2 billion of assets. "The economic recovery in the U.S. and Europe will also help their exports."
The MSCI Asia Pacific Index has surged 41 percent in the past 12 months as government spending and lower borrowing costs dragged economies around the world out of recession. That’s driven the average price of companies on the gauge to 1.64 times book value, the highest level since September 2008.

China, India

China’s Shanghai Composite Index rose 1.9 percent, the most in more than two weeks. SAIC Motor, the country’s biggest automaker, climbed 3.5 percent and Chongqing Changan Automobile Co. added 2.9 percent, after the biggest jump in domestic vehicle sales in at least 10 years. Sales rose 46 percent to
13.6 million last year, the China Association of Automobile Manufacturers said yesterday.
China Cosco Holdings Co., the world’s largest operator of dry-bulk ships, advanced 5.4 percent, the most in three months, as JPMorgan Chase & Co. predicted container volume will increase.
Infosys Technologies Ltd., India’s second-largest software exporter gained 3.5 percent after it reported profit that beat analysts’ estimates and raised its annual revenue forecast. Tata Consultancy Services Ltd., its biggest rival, surged 4.6 percent, while Wipro Ltd. jumped 5.4 percent.
"Infosys sets the tone for the sector," said Apurva Shah, head of research at Prabhudas Lilladher Pvt. in Mumbai. "The software sector has shown consistent improvement since the first quarter and will continue to do so for the next few quarters."

Banks, Miners

Chinese banks fell in Hong Kong after the People’s Bank of China sold one-year bills at a yield of 1.8434 percent in open- market operations, eight basis points higher than last week.
Industrial & Commercial Bank of China Ltd., the nation’s biggest lender, lost 2.2 percent.
Australia’s S&P/ASX 200 Index sank 1 percent, led by mining companies. Alumina Ltd. slumped 4.8 percent to A$1.96 in Sydney.
The company owns 40 percent of a venture with Alcoa. BHP Billiton Ltd., the world’s biggest mining company, dropped 2.1 percent to A$43.56. Alcoa, which reported after the U.S. market closed, fell 4.3 percent in after-hours U.S. trading.
"Investors at present are nervous, with many thinking we’ve had a rally that’s not yet deserved," said Angus Gluskie, who oversees $300 million at White Funds Management Pty in Sydney. "Most indicators continue to track in a positive direction, but we’ll need to see more economic data to confirm this in investor minds. The below-consensus result from Alcoa is being used as a reason to take money off the table."

Oil, Treasuries

Crude oil dropped for a second day in New York on forecasts that cold weather in the eastern U.S. will abate this week, curbing demand for fuel. Oil for February delivery fell 0.5 percent to $82.09 a barrel.
"The cold snap in the U.S. seems to be breaking, according to forecasters," said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne.
Treasuries rose, sending 10-year notes to their biggest gain in a week on speculation the Federal Reserve will hold borrowing costs near zero to aid an economic recovery. Ten-year note yields declined 3 basis points to 3.79 percent, according to BGCantor Market data.
"The economy doesn’t have enough power to lead the Fed to raise rates in 2010," said Kei Katayama, who oversees $1.6 billion of non-yen debt in Tokyo as leader of the foreign fixed- income group at Daiwa SB Investments Ltd. "I may buy as the yield rises."

Won Weakens

South Korea’s won led declines in Asian currencies on speculation regional central banks will stem their appreciation to protect an export-led recovery. The won weakened 0.3 percent to 1,123.8 per dollar and the Indonesian rupiah fell 0.3 percent to 9,170. Both retreated from their strongest levels since at least September 2008.
The dollar rose against higher-yielding currencies as speculation the global economic recovery may be slowing spurred demand for the safety of the greenback. The U.S. currency gained the most against the South Korean won and the Norwegian krone after an official at China’s sovereign wealth fund said today he saw an end to the dollar’s recent decline. The dollar gained 0.3 percent to 1,123.75 won and 0.3 percent to 5.6241 krone.

Metals Forecast

Oil, platinum, copper and gold will extend their rally this year as growth in emerging markets including China and investment demand fuel gains, Bank of America-Merrill Lynch executive Diego Parrilla said in an interview yesterday.
Crude oil will probably climb to $100 a barrel by the end of year and gold will gain to $1,500 an ounce in 18 months, said Singapore-based Parrilla, head of commodities for Asia Pacific, citing bank forecasts.
Oil soared 78 percent last year. Gold traded at $1,156.95 an ounce and copper, which advanced for a second day, gained as much as 0.7 percent to $7,617 a metric ton.