Asia Stocks, Emerging Currencies, Metals Climb on Asia Optimism

Asian stocks, emerging-market currencies and metals prices advanced as a share buyback, a jump in earnings and a surge in Korean manufacturing confidence boosted optimism Asia’s economic growth will be sustained.

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The MSCI Asia Pacific Index increased 0.4 percent, rising for the first time in three days, and the Korean won gained 0.3 percent against the dollar. Copper jumped as much as 2.4 percent, the most in a week, and the yen dropped against all of its 16 major counterparts as investors sought higher-yielding assets. S&P 500 futures rose 0.3 percent and the cost of protecting Asia-Pacific bonds from non-payment fell.

Risk appetite increased as Woolworths Ltd., Australia’s biggest retailer, announced a share buyback following an increase in first-half profit, and manufacturing confidence in South Korea jumped to the highest level in more than seven years. India’s economy continues to expand even as concerns that Europe is sinking under Greek and Spanish debt rattle world markets.

“Structural problems have become most evident in Europe, but emerging markets free from those risks are still growing at a rapid pace,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “Overall economic data are turning positive, except in Europe.”

The MSCI Asia Pacific Index climbed to 117.46 at 11:22 a.m. in Tokyo. Almost two stocks advanced for every one that dropped as gains among Australian retailers and raw-material producers overshadowed declines by technology companies.

Woolworths, Harvey Norman

Woolworths climbed 3.5 percent. Harvey Norman Holdings Ltd., the nation’s largest furniture and electronics retailer, gained 2.9 percent. In Seoul, Hynix Semiconductor Inc. sank 3.2 percent on concern creditors will sell shares in the company.

Higher-yielding currencies advanced. South Korea’s won rose 0.3 percent to 1,161 per dollar at 12:20 p.m. in Seoul and the Philippine peso climbed 0.1 percent to 46.17. The yen weakened 0.5 percent to 12.99 won, 0.4 percent to 79.46 per Australian dollar and 0.5 percent to 11.54 yen per South African rand.

South Korean manufacturers’ confidence rose in March to the highest level since the fourth quarter of 2002 as the recovery in Asia’s fourth-largest economy strengthened. An index measuring expectations climbed to 101 from 92 in February, the highest since the fourth quarter of 2002, the Bank of Korea said.

Emerging-markets bond funds received net inflows for a 16th week as investors sought higher yields after the Federal Reserve said U.S. borrowing costs could stay low for an extended period. Investors ploughed more than $3.5 billion into debt sold by developing nations this year, extending a record gain in 2009, according to EPFR Global, a Cambridge, Massachusetts-based research company.

Copper, India

Copper for three-month delivery climbed as high as $7,165 a ton and traded at $7,109 a ton at 10:55 a.m. in Singapore. Aluminum added 1.1 percent to $2,108 a ton as manufacturers in Japan increased production more than economists estimated in January. Factory output rose 2.5 percent from a month earlier, the 11th straight gain, the government said today.

India’s growth rate will accelerate to 8.2 percent in the financial year beginning April 1, a government report showed yesterday in New Delhi. A separate release today is projected to show gross domestic product advanced 6.9 percent in the fourth quarter from a year before.

The Markit iTraxx Asia index of credit-default swaps on 50 investment-grade borrowers outside Japan fell 1.5 basis points to 116.5 basis points as of 8:26 a.m. in Singapore, according to ICAP plc. The risk benchmark is on track for its first daily decline since Feb. 22, according to CMA DataVision in New York.

Nomura Bonds

Nomura Holdings Inc., Japan’s biggest brokerage, raised $3 billion from its first public U.S. bond sale in dollars yesterday. The purpose of the sale was to diversify the Tokyo- based company’s sources of funding and to help expand its underwriting and investment banking services in the U.S., spokesman Tohru Namikawa said.

Crude oil rose in New York, gaining as much as 0.6 percent to $78.67 a barrel on speculation OPEC won’t increase production even as prices rise. Oil reversed some of yesterday’s 2.3 percent slump, its biggest decline in almost three weeks.

“There’s a lot of expectation priced in” to oil at the moment, said David Moore, commodity strategist with Commonwealth Bank of Australia in Sydney. “Strictly speaking, the current level of oil demand doesn’t actually warrant” current prices.

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