Asian pullback continues

GLOBAL MARKETS/ STOCK REPORT

Asian stocks rose for a second day, led by banks and securities companies, as China grew more than 11 per cent and US lawmakers said they were close to agreement on an economic stimulus package.

Macquarie Group paced gains among financial companies after New York regulators met with US banks to consider bailing out bond insurers. Kookmin Bank led an advance in South Korea, where the government asked pension funds to buy more shares.

"There are expectations that China's growth can offset a US slowdown," said Mona Chung at Daiwa Asset Management in Hong Kong.

The MSCI Asian index climbed 1.7 per cent to 139.6 at 7:11 pm in Tokyo, adding to yesterday's 4 per cent advance. The two-day rally will be the biggest since a similar period ended in May 19, 2004.

China's CSI 300 jumped following a report that showed the nation's economy expanded 11.2 per cent in the fourth quarter.

In Japan, the Nikkei 225 Stock Average rose 2.1 per cent to 13,093 Singapore's Straits Times Index surged 2.2 per cent after China said it will allow its banks to invest in the city-state's stocks and funds.

Hong Kong's Hang Seng Index fell, erasing gains of 3.6 per cent after Societe Generale, France's No. 2 bank by market value, reported a 4.9 billion-euro ($7.1 billion) trading loss and accused an unidentified trader of fraud.

EUROPE
European stock-index futures advanced, following gains in the US and Asia after a plan to bail out bond insurers lifted investor confidence.

UBS and Deutsche Bank will probably gain. BHP Billiton, the world's largest mining company, advanced in Asia as metals prices rose. Carrefour, Europe's biggest retailer, may climb after sales beat analysts' estimates.

Siemens, the largest engineering company, reported better-than-expected profit. Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, added 151 points, or 4.2 per cent, to 3,756 at 7:31 am in London.

The Stoxx 600 entered a bear market this week, after extending declines to more than 20 per cent from a 6 1/2-year on June 1, on concern that the US economy is heading into a recession. US
US stock-index futures retreated after EBay's sales outlook missed analyst estimates and as investors speculated a report on Thursday may show sales of existing homes declined.

Standard & Poor's 500 Index futures expiring in March declined 6.4 to 1,335.1 as of 10:03 a.m. in London. Dow Jones Industrial Average futures fell 75 to 12,197 and Nasdaq 100 Index futures decreased 2.75 to 1,804.75.

US stocks rallied the most in two months yesterday on speculation lower borrowing costs and a plan to bail out bond insurers will restore confidence in the financial system.

Citigroup Inc, JPMorgan Chase and Bank of America Corp, the largest US banks, sparked the biggest gain in financial shares in five years.