Asian stocks climbed, snapping a six-day losing streak, on speculation the US Senate will approve a $700 billion bank-rescue plan to revive credit markets and support the global economy.
Westpac Banking Corporation, Australia’s third-largest bank, rallied 8.2 per cent as lawmakers reconsidered opposition to the package that prompted the largest drop in US shares for 21 years. Rio Tinto Group surged 12 per cent after Australian regulators said they won’t oppose BHP Billiton’s takeover.
Daikin Industries dropped as Japan’s manufacturers turned pessimistic on the economy for the first time in five years.
“The very expectation US politicians might do something is proving positive for markets,’’ said Troy Angus, who helps manage $3.1 billion at Paradise Investment Management in Sydney. “The financial crisis might abate, but we still have the impact on the real economy to work its way through worldwide.’’
The MSCI Asia Pacific Index climbed 1.8 per cent to 108.91 as of 8:33 pm in Tokyo, with financial shares accounting for 38 per cent of the advance. The gauge lost 8.6 per cent in the previous six days as the failures of Washington Mutual and Bradford & Bingley, record-high bank borrowing costs, and the rejection of the rescue plan rattled investor confidence.
Japan’s Nikkei 225 Stock Average gained 1 per cent to 11,368.26. Most markets in Asia rose. China, Hong Kong, Indonesia, the Philippines, Malaysia and Singapore were shut for holidays.
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Samsung Electronics led a 0.6 per cent drop in South Korea’s Kospi index after Macquarie Group said semiconductor profit margins will decline. Mitsui O S K Lines led shipping stocks lower as the Baltic Dry Index, a measure of costs to transport commodities, completed its worst month on record.
Bailout ‘Catalyst’
US stocks jumped the most in six years yesterday on renewed confidence a bailout will be passed this week. The Standard & Poor’s 500 Index surged 5.3 per cent, a day after posting an 8.8 per cent decline. Futures on the S&P 500 declined 0.9 per cent on Wednesday.
The Septemebr 29 slump wiped off $1.2 trillion in market value from American equities and sent lawmakers scrambling to revive the rescue plan in order to prevent a meltdown in financial markets. Senate Democrats and Republicans agreed to vote on the bailout later on Wednesday.