Asia scrips hit new high

GLOBAL MARKETS

Asian stocks climbed to a record after Japan's economy grew at the fastest pace in three years and the US Federal Reserve chairman damped concern interest rates will rise.

The Morgan Stanley Capital International Asia-Pacific Index added 1.1 per cent to a record 146.42 as of 6:20 pm in Tokyo. Nine of the measure's 10 industry groups rallied. Japan's Nikkei 225 Stock Average rose 0.8 per cent to 17,897.23.

Japan's gross domestic product (GDP) expanded at an annual 4.8 per cent pace in the three months ended December 31, the Cabinet Office said before the market opened. That was the fastest pace since March 2004.

Benchmarks in Australia, Singapore and China climbed to records, while those in Malaysia and the Philippines rose to 10-year highs. Stock markets advanced around the region, except in Thailand. Taiwan was closed for a holiday.

Seven & I jumped 4.8 per cent to 3,750 yen, the biggest gain since January 4, 2006. Takashimaya Co, Japan's biggest department store operator, surged 10 per cent to 1,690 yen. Millea Holdings, the nation's largest insurer, advanced 4.3 per cent to 4,400 yen.

"With the GDP figure showing good balance between internal and external demand, I'd give it a perfect score,'' said Masayuki Kubota, who oversees $2.1 billion in assets at Daiwa SB Investments in Tokyo. "Investors are re-discovering retailers and other domestic demand-oriented stocks.''

US

US stock and index futures were little changed before economic reports that may help Federal Reserve Chairman Ben S Bernanke decide on the scope for an interest rate cut as he testifies in Congress for a second day. "If people believe that inflation is not as high as it was before, then that's good for stocks, but I think the larger issue is what the Fed is going to do next,'' said Michael Santelli, who oversees $250 million in mid-cap value as senior fund manager at Allegiant Asset Management Co.

Europe

European carmaker stocks rallied, sending the Dow Jones Stoxx Automobile Index to a nine-year high. Carmakers are the best performing shares among 18 industries on the Stoxx 600 this year on optimism that companies are cutting costs and combining to boost profits.

"Auto stocks are benefiting from DaimlerChrysler's possible deal with GM,'' said Piers Hillier, head of European equities at WestLB Mellon Asset Management UK in London, which manages $35 billion. "Good numbers from the tyremakers are also helping.''

The Stoxx 600 fell 0.2 per cent to 381.13 as of 9:51 am in London. The Stoxx 50 lost 0.3 per cent and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, fell 0.2 per cent.

Daimler climbed 5.9 per cent to 54.55 euros today. General Motors, the world's largest automaker, is in discussions with Daimler's Chrysler unit on an alliance to share the costs of developing cars, people with knowledge of the talks said.

Michelin rose 6.3 per cent to 79.7 euros. The tyremaker aims to reduce costs by as much as 1.7 billion euros this year, compared with 2006 by cutting purchasing spending, production and industrial costs and improving logistics.

National benchmarks rose in 12 of the 17 western European markets. Germany's DAX Index rose 0.1 per cent and France's CAC 40 fell 0.1 per cent. The UK's FTSE 100 was little changed.

Akzo Nobel retreated 4.3 per cent to 44.82 euros. The maker of Sikkens paints said fourth-quarter profit fell as the company spent more on research and administration and didn't repeat one-time benefits from legal settlements.

Groupe Danone, the world's largest yogurt maker and the bottler of Evian water, added 3.4 per cent to 124.3 euros. Danone said yearly net income fell 7.5 per cent as one-time gains from asset sales weren't repeated.

Credit Suisse Group, Switzerland's second-largest bank, gained 2.9 per cent to 91.3 Swiss francs after the company said fourth-quarter net income climbed to a record 4.67 billion Swiss francs ($3.8 billion).

Profit, which included 1.8 billion francs from the sale of the Winterthur insurance unit to Axa, beat the 3.63-billion franc estimate of analysts.