Asia stocks at 3-wk high High on Fed Stance; Sony Advances

GLOBAL MARKETS

Asian stocks climbed to a three-week high after the U.S. Federal Reserve abandoned its bias toward an increase in interest rates. Sony Corp. and Samsung Electronics Co. led gains among exporters.

"Asia's growth is still geared toward trade with the US,"said Peter Chiang, who helps oversee about $8 billion as chief investment strategist at DBS Asset Management in Singapore.

"The Fed's comments give it more leeway to ease interest rates and provide relief to a market that's worried about a fallout from a slowing US economy."

Cnooc Ltd. advanced as crude-oil prices rose for a third day, while a rise in gold prices helped lift Newcrest Mining Ltd. Cheung Kong (Holdings) Ltd. and Cosco Pacific Ltd. reported higher earnings, helping lift Hong Kong's Hang Seng Index.

The Morgan Stanley Capital International Asia-Pacific Index added 1.7 per cent to 145.84 at 5:04 pm in Tokyo. It's set for the highest close since Feb. 27, the day a plunge in Chinese stocks triggered a global rout that erased $3.3 trillion of market value. All of the benchmark's 10 industry groups rose.

The Nikkei 225 Stock Average climbed 1.5 per cent to 17,419.20 and the Topix index added 1.4 percent, boosted by gains in Nippon Steel Corp. and JFE Holdings Inc. after Japan's steel exports increased. China's key stock index advanced to a record, completing its recovery from the recent sell-off, while Pakistan was the only market to decline in the region.

The Standard & Poor's 500 Index yesterday added 1.7 per cent to 1435.04, its best performance since July 19. The Dow Jones Industrial Average rose 1.3 per cent.

Gains came after the Fed dropped a reference to "additional firming" in a statement accompanying its latest interest-rate decision. Central bankers held the benchmark rate at 5.25 per cent for a sixth meeting, as forecast by all 94 economists in a Bloomberg News survey.

The change in the Fed's statement fueled speculation US demand for products such as Sony PlayStation video-game consoles and Samsung televisions will be sustained.

Japan's trade surplus widened 7.7 per cent in February from a year earlier, a government report today showed, after exportsto the U.S. and China grew more than some economists anticipated.

Exports climbed 9.7 percent, more than the 6 per cent median estimate of 16 economists surveyed by Bloomberg News.

Sony, the world's biggest maker of video-game players, jumped 1.5 percent to 6,180 yen. Canon Inc., the world's largest digital camera maker, advanced 1.7 per cent to 6,540 yen.

Samsung Electronics, the world's No. 1 maker of computer-memory chips, added 0.5 percent to 582,000 won.

Positive Reaction

The U.S. is Sony's biggest export market and contributed 31 percent of Canon's total revenue last year. Samsung accounted for about 16 percent of South Korea's exports in 2006.

Australia's James Hardie Industries NV, the biggest supplier of home siding in the U.S., rose 2.2 percent to A$8.39.

BHP Billiton Ltd., the world's largest mining company, gained 1.7 percent to A$29.26.

``The Fed has neutralized its monetary policy and investors reacted positively to the move,'' said Takashi Kamiya, who oversees $16 billion at T&D Asset Management Co. in Tokyo. ``The change eased concern further tightening would hurt the U.S. housing market and that's positive for stocks.''

Fed policy makers said they expect the economy to keep growing at a ``moderate pace'' in coming quarters even though recent economic figures have been ``mixed'' and the ``adjustment in the housing sector is ongoing.''

Oil, Gold, Steel Cnooc, China's largest offshore oil producer, jumped 1.6 percent to HK$6.44 in Hong Kong. Inpex Holdings Inc., Japan's biggest oil explorer, added 2.3 percent to 939,000 yen.

Woodside Petroleum Ltd., Australia's No. 2 oil and gas company after BHP, gained 2 percent to A$36.65.

Oil futures in New York rose 0.8 percent to $60.10 in after-hours trading, extending yesterday's 0.6 percent advance.

Newcrest, Australia's largest gold mining company, climbed 3.5 percent to A$23.13. Hong Kong-listed Zijin Mining Group Co., which owns China's largest gold mine, added 2.8 percent to HK$5.15.

Gold futures rose 0.9 percent to $666.10 an ounce in electronic trading, headed for the highest close in three weeks.

In Hong Kong, the Hang Seng Index added 0.9 percent to 173.84, rounding off the longest rally in a month.

"The market benefits because there wasn't negative comment coming out from the Fed, and that has eased some investors' concerns,'' said Mona Chung, who helps manage about $950 million at Daiwa Asset Management Ltd. in Hong Kong. The city typically adjusts rates in tandem with the U.S. because the local currency is linked to the dollar.