US retail cues boost Asia

Asian stocks had their first back-to-back advance this year after US retail sales climbed by the most in five months and machinery orders in Japan rose. Samsung Electronics and Honda Motor led gains by exporters.

"US consumption is solid overall as seen in the retail sales figure and that means exporter shares will also perform well," said Junichi Misawa, who oversees $655 million in funds at STB Asset Management Company in Tokyo.

Mitsubishi UFJ Financial Group Inc-led lenders higher on speculation Japan's central bank will increase interest rates this week, making loans more profitable. PetroChina Co, the nation's largest oil producer, rose after oil futures had their biggest jump in more than six weeks.

The Morgan Stanley Capital International Asia-Pacific Index added 1.1 per cent to 140.24 at 7 pm in Tokyo. The measure gained 1.8 per cent on January 12. Stock markets around the region rose.

Japan's Nikkei 225 Stock Average advanced 0.9 per cent to 17,209.92, while the broader Topix climbed 1.2 per cent to an eight-month high. Hong Kong's Hang Seng Index jumped 2.3 per cent. The S&P/ASX 200 Index in Australia advanced 0.6 per cent to a record.

Woodside Petroleum, the nation's second-largest oil and gas producer, paced the rally.

The Shanghai and Shenzhen 300 Index surged 5.2 per cent, the most in 19 months and Asia's biggest rally. China Vanke Company-led property shares higher on speculation gains by the yuan will drive up asset prices.

Samsung, South Korea's biggest exporter, advanced 1.5 per cent to 612,000 won. Honda, Japan's third-largest carmaker, climbed 1.7 per cent to 4,690 yen.

Stats Chippac, Southeast Asia's largest provider of chip-testing and packaging services, rose 2.6 per cent to S$1.20. Sony Corp, maker of the PlayStation 3 video-game console, jumped 2.5 per cent to 5,700 yen. Retail sales in the U.S. climbed 0.9 per cent in December, the Commerce Department said on January 12, capping the strongest back-to-back gains in almost a year. Economists had expected a 0.7 per cent increase.

Sales at US retailers account for almost half of Japan's consumer spending, which in turn makes up more than two-thirds of the economy. The US buys about a fifth of all Asian exports, Merrill Lynch & Co estimates.

Speculation that the Bank of Japan will raise interest rates this week increased after a government report showed that machinery orders climbed 3.8 per cent in November, more than the 3.5 per cent gain forecast by economists in a Bloomberg survey.

PetroChina, which today reported record oil and gas production for 2006, rose 1.9 per cent to HK$9.96 in Hong Kong. Woodside Petroleum added 1.6 per cent to A$36.38.

The MSCI Asia-Pacific Energy Index gained 1.5 per cent. Crude oil in New York climbed 2.1 per cent on January 12 to $52.99 a barrel. The advance was the most since Nov. 29. Prices were at $53.37 in after-hours trading.

Meanwhile, UK stocks advanced, led by Smiths Group Plc after General Electric Co agreed to buy the company's aerospace division. BAE Systems Plc and Rolls-Royce Group Plc gained.

The benchmark FTSE 100 Index rallied 25.60, or 0.4 per cent, to 6264.60 in London at 11:02 am. The FTSE All-Share Index added 15.47, or 0.5 per cent, to 3242.75. Ireland's ISEQ Index rose 41.53, or 0.4 percent, to 9379.05.