22 Feb 2010
Feb. 22 (Bloomberg) -- Asian stocks jumped the most since November, oil rose and the yen fell on speculation Federal Reserve Chairman Ben S. Bernanke will signal that U.S. interests rates will be kept near a record low.The MSCI Asia Pacific Index gained 2.5 percent to 118.23 as of 5 p.m. in Tokyo. Futures on the Standard & Poor's 500 Index climbed 0.4 percent. The Dow Jones Stoxx 600 rose 0.2 percent to 250.73 at 8 a.m. in London. Oil rallied for a fifth day, rising above $80 a barrel. The yen weakened against all 16 of its most-traded counterparts.
Bernanke may tell Congress this week that an interest rate increase isn't imminent amid a weak jobs market, said Ethan Harris, head of economics for North America at Bank of America Merrill Lynch. New York Fed President William Dudley said on Feb. 19 that policy makers need to focus on growth rather than inflation, citing a smaller-than-forecast increase in the consumer-price index for January, a day after the Fed raised its discount rate to 0.75 percent from 0.5 percent.
"Markets were spooked last week by the U.S. Federal Reserve's decision to lift the discount rate," said Tim Schroeders, who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne. "The news on the U.S. consumer-price index is a net positive which should allow markets to push higher."
Fifteen stocks rose for every one that fell on the MSCI Asia index. A gauge of raw material producers posted the biggest gain of the MSCI Asia Pacific Index's 10 industry groups today. BHP Billiton Ltd., the world's largest mining company, increased 2.8 percent to A$42.16. Mitsubishi Corp., a trading company that gets about 40 percent of sales from commodities, advanced 3.2 percent to 2,282 yen in Tokyo.
Nikkei Surges
Japan's Nikkei 225 Stock Average advanced 2.7 percent, Hong Kong's Hang Seng Index jumped 2.5 percent and South Korea's Kospi Index gained 2.1 percent. China's financial markets opened after a week-long Lunar New Year holiday. S&P 500 futures expiring in March increased, indicating that a four-day rally that lifted the index up 3.1 percent last week may continue.
United Co. Rusal Ltd., the world's largest aluminum producer, surged 5.9 percent to HK$7.94 in Hong Kong. The company said today that it plans to produce 3 percent more aluminum this year than in 2009 and 7 percent more alumina.
Suruga Bank surged 7.4 percent to 801 yen in Tokyo. The lender increased its stock buyback program. Sun Hung Kai Properties Ltd., the world's biggest developer by market value, gained 1.9 percent to HK$102 in Hong Kong after selling HK$4.2 billion ($540 million) of apartments in the city over the weekend.
Won Gains
The won gained against all the most-traded currencies, climbing 1.1 percent against the dollar, the most in seven weeks, and 1.3 percent versus the yen. Sales at South Korea's major department-store chains rose in January for an 11th month, the government said today.
"We should see more foreign buying interest in the local stock and bond markets along with the recovery," said Calbert Loh, head of treasury at Bangkok Bank Bhd. in Kuala Lumpur. "The plus point is that the U.S. won't be in a hurry to raise interest rates as the recovery is still fragile and inflation benign."
The yen dropped to 125.00 per euro in Tokyo from 124.58 in New York on Feb. 19, after touching 125.24, the lowest since Feb. 4. The dollar was at $1.3633 per euro from $1.3613 on Feb. 19, when it touched $1.3444, the highest since May 18.
Euro Bears
Futures traders are more bearish than ever on the 16-nation euro, and strategists are slashing forecasts at the fastest clip since December 2008, data compiled by Bloomberg show.
Greek Finance Minister George Papaconstantinou said "a few hedge funds" are "betting against the euro in general and Greece in particular," speculating that other euro-region states will fail to rein in their budget deficits, Welt-am-Sonntag reported yesterday.
Credit default swaps show Asia bond risk fell to the lowest in almost three weeks. The Markit iTraxx Australia index fell 5.75 basis points to 92.75 basis points while the Markit iTraxx Asia index of 50 borrowers outside Japan fell 5 basis points to 113, Citigroup Inc. prices show.
Crude oil above $80 a barrel for a second day, gaining as much as 0.8 percent to $80.47 a barrel in New York, on speculation energy demand will increase as the global economy recovers. Global consumption may increase by as much as 1.4 million barrels a day in the second half, Iran's OPEC governor Mohammad Ali Khatibi said in an interview on the Shana Web site yesterday.
Copper for three-month delivery dropped 0.8 percent to $7,370 a metric ton on the London Metal Exchange after jumping 9.1 percent last week, the most since July. Gold climbed for a third day to a one-month high as the dollar's rally slowed. Metal for immediate delivery rose as much as 1 percent to $1,131 an ounce, the highest since Jan. 20, before trading at $1,125.22.
