Asian Stocks Snap Six-Day Loss on Bank Rescue Bill Speculation

Oct. 1 (Bloomberg) — Asian stocks climbed, snapping a six- day losing streak, on speculation the U.S. Senate will approve a $700 billion bank rescue plan to revive credit markets and support the global economy.

Westpac Banking Corp., Australia’s third-largest bank, rallied 5.4 percent as lawmakers reconsidered opposition to the relief package that caused the largest drop in U.S. shares in more than two decades on Sept. 29. BHP Billiton Ltd. advanced after oil prices climbed. Daikin Industries Ltd. led Japan’s industrial shares lower as manufacturers turned pessimistic on the economy for the first time in five years.

“The very expectation U.S. politicians might do something is proving positive for markets,” said Troy Angus, who helps manage A$3.6 billion ($3.1 billion) at Paradice 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, which could conceivably take another year.”

The MSCI Asia Pacific Index climbed 1.2 percent to 108.33 as of 12:51 p.m. in Tokyo. The gauge lost 8.6 percent in the previous six days as the failures of Washington Mutual Inc. and Bradford & Bingley Plc, record-high bank borrowing costs and the rejection of the rescue plan rattled investor confidence.

Japan’s Nikkei 225 Stock Average gained 0.7 percent to 11,334.26. Most markets in Asia rose. China, Hong Kong, Indonesia, the Philippines, Malaysia and Singapore were shut for holidays.

Mitsui O.S.K. Lines Ltd. led declines among shipping stocks as the Baltic Dry Index, a measure of costs to transport commodities, completed its worst month on record.

Bailout `Catalyst’

U.S. 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 percent, a day after posting an 8.8 percent decline. Futures on the S&P 500 declined 0.5 percent today.

The Sept. 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 today.

“The erosion of a trillion dollars of shareholder wealth may be the catalyst required to get voters to pressure their leaders to approve a financial rescue package,” Patrick Mohr, an equity strategist at Nikko Citigroup Ltd. in Tokyo, wrote in a report. “If the `pass the bill’ chorus from voters becomes loud enough there should be no problem with passage.”

The deepening credit crisis helped drag the MSCI Asia Pacific down by 15 percent last month, the most since 1990.

Oil Prices

Westpac gained 5.5 percent to A$22.67. Nomura Holdings Inc., Japan’s largest brokerage, jumped 4.7 percent to 1,388 yen. Commonwealth Bank of Australia, the nation’s largest lender, added 3.7 percent to A$44.20.

BHP Billiton, the world’s largest mining company, gained 4.5 percent to A$32.38. Mitsubishi Corp., Japan’s largest trading company, and which generates more than half of its profit from commodities dealing, climbed 3.7 percent to 2,235 yen.

Crude oil for November delivery rose 4.4 percent to $100.64 a barrel in New York, rebounding from its biggest drop in seven years. The contract recently traded at $101.50.

Daikin, the biggest Japanese maker of air conditioners, dropped 3.5 percent to 3,350 yen. Toray Industries Inc., the world’s largest maker of carbon fiber, declined 1.2 percent to 481 yen.

Baltic Dry

The Bank of Japan’s Tankan index of confidence among large manufacturers, the nation’s most closely watched economic release, dropped below 0 for the first time since 2003, indicating pessimists outnumber optimists. Companies surveyed indicated they are scaling back capital spending plans as the global economy moves toward recession.

Mitsui O.S.K., Japan’s second-biggest bulk shipper, slid 4.6 percent to 843 yen. Kawasaki Kisen Kaisha Ltd., the third biggest, dropped 4.9 percent to 601 yen. Hyundai Heavy Industries Co., the world’s largest shipbuilder, slumped 3.4 percent to 260,000 won.

The Baltic Dry Index lost 8.2 percent yesterday, bringing its slide for September to a record 53 percent.

Sumitomo Chemical Co. slumped 5.9 percent to 428 yen, set for the lowest close since March 2004. The Japanese producer of petrochemicals and pharmaceuticals slashed its full-year net income forecast yesterday by 73 percent due to higher costs.

Samsung Electronics Co. led South Korean shares lower, dropping 2.6 percent to 525,000 won. Semiconductor profit margins for Asia’s biggest maker of computer chips will turn negative in the fourth quarter, according to Macquarie Group Ltd.

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