Asian stocks reverse losses

GLOBAL MARKETS/ STOCK REPORT

Asian stocks rose, reversing earlier declines, on speculation the US and UK will step up measures to contain sub-prime loan losses and support economic growth.

Mitsubishi UFJ Financial Group led lenders higher after the Daily Telegraph reported the UK may nationalise Northern Rock, which the Bank of England bailed out in September.

US regulators and banks are in talks to freeze interest rates on sub-prime mortgages for five years, a person familiar with the negotiations said.

"The government plans will help stitch up investor sentiment for the time being," said Kim Young June, who oversees $1.6 billion in global stocks at Woori Credit Suisse Asset Management in Seoul.

"Asian stocks also benefit from having less direct exposure to the sub-prime problems in the US and Europe, which attracts money."

The MSCI Asia Pacific Index added 0.4 per cent to 162.74 as of 7:11 pm in Tokyo, while Japan's Nikkei 225 Stock Average added 0.8 per cent. Both erased declines of 0.7 per cent. Most markets in the region rose.

MSCI's regional index had dropped as much as 11 per cent from its November 1 record amid speculation rising losses tied to investments in US sub-prime mortgages will slow growth in the world's largest economy.

The MSCI index had fallen 0.7 per cent early on Wednesday after JPMorgan Chase forecast more writedowns at US security firms.

EUROPE
European stocks gained for the first time in three days, led by commodity producers, as metal and oil prices increased.

Anglo American, the world's second-biggest mining company, and Total, Europe's largest refiner, rose. Bouygues led gains made by construction companies after reporting profit that beat analyst estimates and raising its full-year sales forecast.

The Dow Jones Stoxx 600 Index added 0.5 per cent to 365 at 8:10 am in London. The Stoxx 50 increased 0.3 per cent, and the Euro Stoxx 50 rose 0.5 per cent. The yen fell against 14 of the world's 16 most-actively traded currencies. European government bonds declined in London, snapping two days of gains.

US
US stock-index futures gained as investors speculated rising computer-chip prices will boost the profit outlook for semiconductor makers. Intel and Advanced Micro Devices (AMD) advanced in Europe.

Wal-Mart Stores climbed after the world's biggest retailer said it has lifted its stake in Seiyu and plans to buy the remaining shares in the Japanese chain. Standard and Poor's 500 Index futures expiring in December added 10.70 points to 1,474 as of 10:05 am in London.

Dow Jones Industrial Average futures increased 82 points to 13,344. Nasdaq-100 Index futures rose 12 points to 2,074.25.

Reports due on Wednesday are forecast to show slowing growth in employment and the service industry, supporting speculation among some investors that the Federal Reserve will lower interest rates by half a percentage point next week.