Asian stocks rose for a fourth day after US Federal Reserve Chairman Ben Bernanke said the Fed may buy more bonds to boost growth, and material shares followed commodity prices higher, countering falls by Japan's exporters.
Cnooc, China's biggest offshore oil explorer, climbed 2.5 per cent in Hong Kong after oil and metal prices gained. Mitsui, which counts commodities as its largest source of profit, increased 2 per cent in Tokyo. Riversdale Mining surged 14 per cent after the company said Rio Tinto Group made a takeover proposal. Canon, the world's largest camera maker, led Japanese exporters lower, falling as much as 1.7 per cent as a stronger yen versus the dollar damped its earnings outlook.
The MSCI Asia Pacific Index gained 0.1 per cent to 133.62. The gauge earlier dropped less than 0.1 per cent. About five stocks rose for every three that fell. Stocks slid 0.6 per cent last month after North Korea attacked the South and on concern China's anti-inflation measures and Europe's debt crisis will temper the global economic recovery.
“If the Fed were to do more quantitative easing after the implementation of the $600 billion which has already been announced, then that suggests liquidity will remain abundant, and that's a positive contributor to the stock market,” said Khiem Do, the Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management (Asia), which oversees about $US12 billion. “It seems that some of the negative macro factors in the month of November have eased at the moment. So that's why the markets have been able to bounce back up.”
Nikkei falls, Topix rises
Japan's Nikkei 225 Stock Average fell 0.3 per cent, while the broader Topix index rose 0.1 per cent. South Korea's Kospi Index slid 0.2 per cent and Australia's S&P/ASX 200 Index was little changed.
Futures on the Standard & Poor's 500 Index were little changed today. The index climbed 0.3 per cent on December 3 in New York as a rally by energy and metals producers offset concern that slower-than-estimated growth in payrolls will hamper an economic recovery.
US unemployment may take five years to fall to a normal level and Fed purchases of Treasury securities beyond the $600 billion announced last month are possible, Fed chairman Bernanke said in an interview with CBS's 60 Minutes program that aired in the US Sunday night.
'Excess liquidity'
“The message that the US will continue its easing policy until the economy recovers is leading to speculation that excess liquidity will continue to support the market,” said Naoki Fujiwara, a fund manager in Tokyo who helps oversee $6 billion at Shinkin Asset Management.
A measure of energy and materials related companies rose the most among the MSCI Asia Pacific Index's 10 industry groups.
Cnooc gained 2.5 per cent to HK$18.18, the biggest contributor to the MSCI Asia Pacific Index's gains. PetroChina, the biggest Chinese oil company, rose 1.9 per cent to HK$10.12. Mitsui, a Japanese trading company, jumped 2 per cent to 1368 yen.
Crude oil rose to its highest level in 26 months in New York. The January delivery contract added as much as 41 cents to $89.60 a barrel in electronic trading on the New York Mercantile Exchange, the highest since October 7, 2008, and was at $US89.54. Oil has climbed 12.9 per cent this year. Copper increased for a fifth day, set for its longest rally since July.
Riversdale surges
Also today, Riversdale Mining, which is developing coal mines in Africa, said Rio made an initial $3.5 billion takeover offer. Rio offered $15 for each of its shares, Sydney-based Riversdale said today in a statement. Riversdale Mining surged 14 per cent to $16.02, posting the biggest increase on the Australia's S&P/ASX 200 Index. Rio decreased 0.3 per cent to $86.18.
The MSCI Asia Pacific Consumer Discretionary Index, which includes Canon, Honda and Panasonic as its members, slid 0.2 per cent, the most among the 10 industry groups on the broader MSCI Asia Pacific index.
Canon, which receives over 80 per cent of its revenue outside of Japan, slid 1.6 per cent to 4,045 yen. Honda, which counts North America as its biggest market, dropped 1.1 per cent to 3,120 yen. Panasonic, the world's largest maker of plasma televisions, declined 1.7 per cent to 1185 yen.
The dollar tumbled on Dec. 3 after US Labor Department figures showed payrolls increased by 39,000 last month, less than the most pessimistic projection of economists surveyed by Bloomberg News. Unemployment held near a 26-year high.
Japanese exporters
The dollar traded at 82.84 yen today in Tokyo, near its lowest level in three weeks. A weaker dollar reduces the value of overseas income at Japanese companies when converted into their home currency.
“The dollar's weakness against the yen on the backdrop of a slow US jobs recovery will weigh on some of the Japanese exporters,” said Toshiyuki Kanayama, a market analyst at Tokyo- based Monex.
The MSCI Asia Pacific Index has climbed about 11 per cent this year through December 3, compared with gains of 9.8 per cent by the S&P 500 and 6.7 per cent by the Stoxx Europe 600 Index. Shares in the Asian benchmark are valued at 14.5 times estimated earnings on average, compared with 14.4 times for the S&P 500 and 12.1 times for the Stoxx 600.