Asia advances on Japan

GLOBAL MARKETS

Asian stocks advanced for a second day after reports in Japan showed an unexpected drop in unemployment and a rise in household spending.

Mizuho Financial Group Inc climbed to a three-month high, on speculation the improving economy will allow the Bank of Japan to lift interest rates, widening lenders' profit margins. China's CSI 300 Index rose to its third straight record as households poured more money into equities, drawn by a rally that's made the benchmark the world's best performer this year.

The Morgan Stanley Capital International Asia-Pacific Index added 0.7 per cent to 149.26 at 8:01 p.m. in Tokyo. Technology stocks rose after Sanyo Electric Co forecast its first annual profit in four years and CJ Investment & Securities Co said earnings at LG.Philips LCD Co will improve.

Japan's Nikkei 225 Stock Average climbed 0.5 per cent to 17,672.56, while the broader Topix index gained 0.8 per cent. Mitsui O S K Lines advanced after UBS AG reaffirmed its bullish stance on shipping companies.

Europe

European stocks rose for the first time in three days after a sales forecast from Vodafone Group lifted phone companies and analysts recommended investors buy shares of Royal Philips Electronics NV and IMI.

Vodafone, the world's largest mobile-phone company, climbed to its highest in more than five years after predicting emerging-market growth that may push revenue above analysts' estimates. Deutsche Telekom AG, Europe's biggest phone company, and Royal KPN NV also gained. Two-thirds of the 39 companies in the Stoxx 50 that have reported earnings or sales have surpassed analysts' estimates.

The value of mergers and acquisitions in Europe has reached $1.23 trillion in 2007, according to data compiled by Bloomberg.

US

US stock-index futures climbed after reports of acquisition talks in the real-estate and telecommunications industries added to speculation the record pace of takeovers will continue.

Stocks ended last week with a gain after Coca-Cola Co made its largest acquisition. More than $1 trillion in mergers and acquisitions has been announced this year, 64 per cent more than a year ago.

Avaya Inc, the world's largest maker of corporate telephone equipment, surged on a report it is in talks to be purchased. Archstone-Smith Trust gained after people familiar with the transaction said the second-largest US apartment real-estate investment trust may be bought for more than $12 billion.