Japanese data lift Asia

GLOBAL MARKETS

Asian stocks gained for the first time in three days after Japan raised its first-quarter growth estimate for the region's biggest economy.

Mitsubishi UFJ Financial Group, Japan's largest bank, climbed on expectations stronger growth will boost profits for domestic businesses. Sony Corp and Samsung Electronics Co rose after a decline in US bond yields damped speculation that the Federal Reserve will raise interest rates in Asia's largest export market.

The Morgan Stanley Capital International Asia-Pacific Index climbed 0.3 per cent to 150.90 at 7:16 p.m. in Tokyo, as eight of the measure's 10 industry groups gained. Stocks fell last week on concern rising global interest rates will curb consumer spending and corporate profits.

Japan's Nikkei 225 Stock Average added 0.3 per cent to 17,834.48. Shares also gained after the yen weakened the most in six weeks against the dollar on June 8, increasing the value of exporters' dollar-denominated sales.

Europe

European stocks rose for the first time in six days as renewed takeover speculation lifted mining and steel companies.

BHP Billiton led mining companies higher after UBS said mergers and acquisitions in the industry "will continue to accelerate". ThyssenKrupp fuelled a rally by steel producers after Interfax reported the world's biggest stainless steelmaker is interested in acquisitions to expand. Axa , Rodamco Europe and Deutsche Bank led gains by financial companies, among the hardest hit last week.

Mergers and acquisitions have stoked a rally in European stocks that sent the Dow Jones Stoxx 600 Index on June 1 to the highest since September 2000. The Stoxx 600 added 0.8 per cent to 388.16 as of 11:57 a.m. in London, after falling 3.8 per cent last week. The Stoxx 50 rose 0.6 per cent today, while the Euro Stoxx 50, a measure for the 13 nations sharing the euro, increased 0.7 per cent.

US

US stocks dropped, sending the Standard & Poor's 500 Index to the steepest weekly loss since a February rout, after bond yields at a five-year high sparked speculation that the Federal Reserve will raise interest rates.

Utilities, which have the highest dividend yield in the S&P 500, fell the most since October 2002. Goldman Sachs Group Inc, the biggest US securities firm by market value, helped lead financial shares lower. Bigger bond yields make stock dividends less attractive and reduce demand for mortgages and other loans.

The S&P 500 pulled back after reaching a record high on June 4 following signs the economy is gaining momentum. Higher-than-expected growth in service industries and accelerating labour costs pushed the yield on the benchmark 10-year Treasury note as high as 5.25 per cent, the most since May 2002.

The S&P 500 lost 1.9 per cent to 1507.67. Its weekly decline was the most since the period including February 27, when the S&P 500 had the steepest one-day loss since March 2003. The Dow Jones Industrial Average retreated 1.8 per cent to 13,424.39, while the Nasdaq Composite Index fell 1.5 per cent to 2573.54.