Asian Stocks Join Global Rally as Nations Work to Ease Crisis

Oct. 29 (Bloomberg) — Asian stocks gained amid speculation Japan will cut interest rates and China will take steps to boost equities, adding to global efforts to revive confidence in financial markets.

Mitsubishi UFJ Financial Group Inc. climbed 10 percent after the Nikkei English News said the Bank of Japan may lower rates to 0.25 percent. Panasonic Corp., the world’s largest maker of consumer electronics, jumped 10 percent after profit beat its quarterly target. BHP Billiton Ltd. advanced after prices for metals and oil gained. The Dow Jones Industrial Average surged 11 percent yesterday, helped by expectations the U.S. Federal Reserve will cut interest rates later today.

The MSCI Asia Pacific Index added 4.9 percent to 81.52 as of 10:04 a.m. in Tokyo, extending yesterday’s 3.4 percent rise. The Nikkei 225 Stock Average advanced 6.5 percent to 8,117.93, while the Korea Exchange halted program trading after index futures surged. Stocks rose in all markets open for trading.

“There’s no way to know if this kind of rebound can continue or not,” said Hideyuki Ookoshi, who helps oversee about $365 million at Chiba-Gin Asset Management Co. in Tokyo. “What is certain is that the Nikkei dropping below 7,000 was a sign of a massive correction in share prices.”

MSCI’s Asian index has lost 49 percent this year and the Nikkei tumbled to a 26-year low earlier this week on concern the widening financial crisis and slowing economic growth will hurt company profits. MSCI’s Asian measure now trades at 1.1 times book value, compared with the S&P 500’s 1.8 times.

Recent rallies have fizzled as financial firms’ losses and writedowns from mortgage-related investments increased to almost $680 billion. Government steps including a $700 billion bank- rescue package in the U.S. and coordinated interest-rate reductions by the world’s central banks have so far failed to have a lasting positive impact on financial markets.

Rate Cut?

Mitsubishi UFJ, Japan’s biggest bank, jumped 10 percent to 607 yen. Mizuho Financial Group Inc., the second largest, rose 5.2 percent to 226,000 yen. Sumitomo Mitsui Financial Group Inc., the third biggest, gained 7.2 percent to 359,000 yen.

The BOJ is considering lowering its benchmark rate by a quarter percentage point, the Nikkei reported. In the U.S., the Federal Reserve will announce its decision as early as today on interest rates.

China’s insurance commission asked the heads of the nation’s largest government-controlled insurers to help stabilize the stock market, the Financial Times reported. Separately, the nation plans to delay the start of margin lending and short selling, originally scheduled to begin next month, on concern they will aggravate volatility, the South China Morning Post said.

Hong Kong officials are divided over whether to impose a possible ban on short selling, the Standard said. The city’s Securities and Futures Commission visited local brokerages yesterday and asked for documentation on short-selling activities, according to the report.

Panasonic, BHP

Panasonic rose 10 percent to 1,550 yen in Tokyo, set to complete its biggest two-day advance. The company said yesterday that second-quarter profit was 55.5 billion yen ($580 million), beating its own forecast of 32 billion yen.

BHP, the world’s biggest mining company and Australia’s largest oil producer, climbed 5.7 percent to A$26.80. Rio Tinto Group, the third-largest miner, advanced 5.8 percent to A$72.22.

The London Metal Exchange LMEX Index, a gauge of six metals, climbed for a second day, adding 3.7 percent yesterday. Crude oil rose 4.5 percent to $65.58 a barrel in after-hours trading.

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