Asian stocks rose to a record, led by Samsung Electronics Co., after North Korea agreed to end its nuclear-weapons program in exchange for aid.
“In terms of market sentiment, the agreement relieves some of the uneasiness about the political situation,” said Michiya Tomita, who oversees about $264 million for Mitsubishi UFJ Asset Management Co. in Tokyo. “It’s a positive development.”
BHP Billiton and Nippon Mining Holdings Inc. led gains by commodity shares as prices of copper and oil rallied. Sony Corp. jumped after Credit Suisse Group raised its rating on Japan’s consumer electronics industry.
The Morgan Stanley Capital International Asia-Pacific Index rose 0.7 % to 144.32 at 3:50 p.m. in Tokyo, set for an all-time high. Eight of the measure’s 10 industry groups gained. Japan’s Nikkei 225 Stock Average added 0.7 % to 17,752.64, while South Korea’s Kospi index climbed 1.3 %.
China’s stocks climbed to a record. Citic Securities Co. advanced as a government report showing slowing inflation damped speculation the central bank will increase interest rates.
DBS Group Holdings Ltd. led gains in Singapore after the government increased its economic growth forecast. Stock markets around the region advanced, except in India and New Zealand.
The Dow Jones Industrial Average yesterday had its biggest rally this year as takeover speculation boosted mining shares and General Motors Corp. jumped after an analyst upgrade. The Dow rose 0.8 %, the best performance since Dec. 27.
Samsung, the most valuable company on the Kospi index, climbed 0.9 % to 567,000 won. Kookmin Bank, South Korea’s biggest lender, rose 1.9 % to 84,900 won.
North Korea agreed late yesterday with South Korea, the U.S., China, Japan and Russia to shut down its Yongbyon nuclear reactor within 60 days in exchange for energy aid. Implementation of the agreement would begin a month from now, said Christopher Hill, chief negotiator for the U.S.
“It’s clear that this will help reduce South Korea’s country risk,” said Lee Jae Hyun, who oversees about $1.1 billion at KTB Asset Management Co. in Seoul. “It’s a short- term positive factor” for both exporters and companies tied to the local economy, he said.
BHP, the world’s biggest mining company by market value and Australia’s largest oil producer, added 0.8 % to A$28.79. Rio Tinto Group, the second biggest, rose 2.3 % to A$77.20.
Nippon Mining, Japan’s biggest copper producer, climbed 4.1 % to 914 yen. Jiangxi Copper Co., China’s largest copper producer, rose 1.8 % to HK$8.45 in Hong Kong.
The price of copper surged 5.1 % in London yesterday, the most in seven months, on signs of rising demand for raw materials in China. A measure of six metals in London rose 4.4 %, the most since Jan. 10.
Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, added 1.9 % to A$37.20. Petronas Dagangan Bhd., the gasoline retailing unit of Malaysia’s state oil company, gained 1.9 % to 5.40 ringgit.
Oil futures in New York rose 2.2 % yesterday. Global oil demand is expected to rise 1.8 % to 86 million barrels a day, the International Energy Agency (IEA) said. That’s 270,000 barrels a day more than the agency predicted a month ago. Oil recently traded at $58.91 a barrel.
Sony, the world’s second-largest manufacturer, climbed 3.8 % to 6,230 yen. Matsushita Electric Industrial Co., Sony’s larger competitor, added 0.9 % to 2,380 yen. Hitachi Ltd., Japan’s biggest electronics group by sales, gained 1.2 % to 829 yen.
Credit Suisse raised its weighting on consumer electronics companies to “overweight” from “market weight,” citing better-than-estimated pricing for flat-panel televisions and improved competitiveness.
Yutaka Nakagawa, who’s in charge of Sony’s chip business, said yesterday the company would reduce investments on semiconductors. He didn’t give specific numbers.
“It’s a positive development for Sony and a good move for any company that doesn’t have much spare capital to spend,” said Fujio Ando, who helps oversee $365 million at Chiba-Gin Asset Management Co. in Tokyo.
The Shanghai and Shenzhen 300 Index, which tracks yuan- denominated A shares listed on the two exchanges, rose 2.3 %. Citic Securities, China’s biggest publicly traded brokerage jumped 5.5 % to 40.04 yuan. China Merchants Bank Co., the nation’s third-biggest publicly traded lender, rose 3.6 % to 17.65 yuan.
China’s inflation cooled to 2.2 % in January, less than December’s 2.8 % rate and the 2.6 % forecast by economists in a Bloomberg News survey. The yield on the benchmark 10-year security fell 9 basis points to 2.99 % as investors pared bets the People’s Bank of China will add to last year’s two interest-rate increases.
“The market is happy to see the inflation figure, which makes rate hikes unlikely,” said Fan Dizhao, who helps manage $1.8 billion at Guotai Asset Management Co. in Shanghai. “That’s a boost for equities.”
Banks led gains in Singapore on speculation stronger economic growth will spur lending. DBS Group advanced 0.9 % to S$22.60. Singapore’s largest bank is scheduled to report its fourth-quarter results tomorrow. United Overseas Bank Ltd., the island’s No. 2 lender, added 0.5 % to S$20.
Southeast Asia’s fourth-largest economy may grow as much as 6.5 % in 2007, above an earlier estimate of as much as 6 %, Singapore’s trade ministry said today. The higher forecast came after the economy expanded in the fourth quarter at more than double the pace of the previous three months.