Asian Stocks Rise as China Refrains From Interest Rate Hike; BHP, Rio Gain

Asian stocks rose as raw-material producers gained after China refrained from raising interest rates to cool inflation, and as copper prices reached a record.

BHP Billiton Ltd., the world’s biggest mining company, rose 0.4 percent in Sydney after copper futures climbed to a record. Rio Tinto Group, the world’s third-biggest miner, gained 0.8 percent. Nippon Steel Corp., Japan’s largest steelmaker, climbed 1.7 percent in Tokyo after JPMorgan Chase & Co. increased its rating on the shares. Li & Fung Ltd., the biggest supplier to Wal-Mart Stores Inc., gained 1.2 percent in Hong Kong after U.S. consumer confidence increased.

The MSCI Asia Pacific Index rose 0.3 percent to 133.49 as of 11:56 a.m. in Tokyo, with about twice the number of stocks gaining as declining. The measure earlier fell as much as 0.1 percent. The gauge dropped 0.3 percent last week as concern grew China’s central bank would raise interest rates to damp growth. The bank instead increased lenders’ reserve ratio requirement.

The central bank’s lack of action “is fairly positive news,” He Zhen, who helps manage $301 million as general manager at Shanghai Huili Asset Management, said in an interview on Dec. 11 after the release of economic data including a report showing the fastest inflation in 28 months. “The central bank will be very cautious about raising interest rates.”

China’s Shanghai Composite Index advanced 1.3 percent and Hong Kong’s Hang Seng Index climbed 0.8 percent.

Regional Benchmarks

Japan’s Nikkei 225 Stock Average climbed 0.1 percent, and South Korea’s Kospi Index was little changed. Australia’s S&P/ASX 200 Index climbed 0.6 percent.

Futures on the Standard & Poor’s 500 Index were little changed today. In New York, the index gained 0.6 percent to 1,240.40 on Dec. 10 after General Electric Co. boosted its dividend, and reports on consumer confidence and the trade deficit beat forecasts.

Confidence among U.S. consumers increased more than forecast in December to the highest level in six months at the same time Americans began stepping up holiday spending. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 74.2 from 71.6 at the end of November. Economists projected a December reading of 72.5, according to the median estimate in a Bloomberg News survey.

Li & Fung rose 1.2 percent HK$45.40 in Hong Kong. Techtronic Industries Co., maker of Hoover vacuum cleaners and Ryobi power tools, gained 2.6 percent to HK$9.85. Belle International Holdings Ltd., China’s largest retailer of women’s shoes, advanced 2.6 percent to HK$14.18.

Raw Materials Rise

Raw material producers gained the most among the 10 industry groups on the MSCI Asia Pacific Index today after the price of copper closed at a record high in New York after imports by China rebounded from the lowest level in a year.

BHP rose 0.4 percent to A$45.64, the biggest contributor to the MSCI Asia Pacific Index. Rio, which receives about 24 percent of its revenue from China, gained 0.8 percent to A$88.05.

Copper for three-month delivery on the London Metal Exchange rose as much as 0.8 percent to $9,065 a metric ton by 9:07 a.m. Singapore time. It reached a record $9,091 on Dec. 9.

Nippon Steel rose 1.7 percent to 298 yen in Tokyo, while JFE Holdings Inc. gained 2.9 percent to 2,841 yen. Nippon Steel also rose after it was boosted to “overweight” from “neutral” by JPMorgan.

While China’s inflation accelerated to the fastest pace in 28 months in November, building the case for Premier Wen Jiabao to raise interest rates again, China instead ordered lenders to park more money with the central bank to counter the threat from inflation.

China Consumer Prices

Consumer prices rose a more-than-forecast 5.1 percent from a year earlier, a statistics bureau report showed in Beijing. Producer-price inflation was 6.1 percent, higher than any of 28 economists surveyed by Bloomberg News had estimated. Reserve requirements will increase 50 basis points starting Dec. 20, the People’s Bank of China said on its website on Dec. 10.

China’s decision to refrain from increasing interest rates and to order banks to set aside larger reserves instead will benefit stocks, Shanghai Huili’s He Zhen said. China’s “large” banks will be the “major beneficiary” of tighter liquidity and higher interest rates this year and in 2011, Deutsche Bank AG said.

The MSCI Asia Pacific Index climbed 10 percent this year through Dec. 10, compared with gains of 11 percent by the Standard & Poor’s 500 Index and 8.8 percent by the Stoxx Europe 600 Index. Shares in the Asian benchmark are valued at 14.7 times estimated earnings on average, compared with 14.5 times for the S&P 500 and 12.3 times for the Stoxx 600.

Westfield Group., the world’s largest owner of shopping centers, plunged 21 percent to A$9.87 in Sydney, posting the biggest decline on the MSCI Asia Pacific Index.

Shares in Westfield Retail Trust, the Australia and New Zealand mall owner carved out of Westfield Group, began trading at noon Sydney time today after they were sold to investors at A$2.75 apiece. They opened at A$2.63 in Sydney. Existing Westfield Group holders received one Westfield Retail Trust share for each Westfield Group share they own.