Asian Stocks Climb to 16-Month High on Growth Speculation

The MSCI Asia Pacific Index advanced 1.4 percent to 123.72 as of 1:21 p.m. in Tokyo, set to close at the highest level since Aug. 29, 2008. The gauge climbed 34 percent last year as lower interest rates and stimulus measures dragged the global economy out of the worst slowdown since World War II.

“What we had last year were expectations for a better economy,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co., which oversees the equivalent of $3.86 billion in Tokyo. “This year, I’m expecting to see a firm economic recovery to shore up demand, which will be confirmed by better company earnings.”

Japan’s Nikkei 225 Stock Average added 1.1 percent. Elpida Memory Inc., the country’s biggest computer-memory chipmaker, surged 9.2 percent after a newspaper reported the company’s Taiwanese unit will double output.

Hong Kong’s Hang Seng Index climbed 1.8 percent, while the Shanghai Composite Index gained 1.2 percent. China stocks are set for a rally in the first quarter of this year amid support from government policies, Goldman Sachs Group Inc. analysts said in a report dated today.

Risky Assets

Malaysia’s FTSE Bursa Malaysia KLCI Index rose 1 percent, set for the highest close since May 2008. Emerging-market equity and bond funds closed 2009 with record annual inflows as a recovery from the global financial crisis boosted demand for riskier assets, EPFR Global said.

Futures on the Standard & Poor’s 500 Index were little changed. The gauge rose 1.6 percent in New York yesterday, the most since Nov. 9, after the Institute for Supply Management said its factory index rose to 55.9, the highest level since April 2006. The median estimate by economists was 54.3. Readings greater than 50 signal expansion.

Stocks around the world rallied last year on signs economies were recovering from the credit crisis. The MSCI Asia Pacific Index’s 2009 advance outpaced gains of 23 percent by the S&P 500 and 28 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the gauge are valued at an average of 20 times estimated earnings, compared with 18 times for the S&P and 13 for the Stoxx.

Sony, Nikon

Sony, the maker of the PlayStation 3 game machine, added 1.4 percent to 2,769 yen. Nikon Corp., a camera maker that counts North America as its biggest market by revenue, rose 3.3 percent to 1,894 yen. Electronics makers were the second-biggest contributor to a 1.4 percent gain by the Topix index.

“We can see from the positive U.S. economic data and rising commodity prices that there is a strong anticipation of a global self-sustaining recovery,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.

Crude oil for February delivery rose 2.7 percent to $81.51 a barrel in New York yesterday, the highest settlement since October 2008, as freezing weather and improving global economies bolstered the outlook for fuel demand. Gold prices surged the most in two months, or 2 percent, and copper futures for March delivery climbed 1.8 percent.

Baltic Dry

Raw-material producers and energy companies accounted for 32 percent of the MSCI Asia Pacific Index’s advance today. Mitsubishi, Japan’s biggest trading company by market value, gained 4.1 percent to 2,413 yen. In Hong Kong, Jiangxi Copper Co. surged 6.7 percent to HK$19.66, while Cnooc Ltd., China’s biggest offshore oil explorer, rose 4.7 percent to HK$12.82.

Shipping stocks gained after the Baltic Dry Index, a measure of shipping costs for commodities, jumped 4.5 percent in London yesterday, the first gain since Dec. 4.

STX Pan Ocean climbed 4 percent to 11,750 won in Seoul and by 3.7 percent to S$14.10 in Singapore. Nippon Yusen K.K., Japan’s biggest shipping line, gained 5.2 percent to 301 yen.

Elpida climbed 9.2 percent to 1,647 yen and was the second- biggest winner on the MSCI Asia Pacific Index. Rexchip Electronics Corp., Elpida’s Taiwanese subsidiary, will invest about 40 billion yen ($434 million) to convert all its production lines to Elpida’s new 45-nanometer chip technology and double production in fiscal 2010, the Nikkei newspaper reported today, without citing anyone.