Bloomberg Asian Stocks Post Third Weekly Gain Amid Economic Optimism

June 6 (Bloomberg) -- Asian stocks climbed for a third straight week as a China purchasing manager’s index and better- than-expected Australia’s gross domestic product figures spurred optimism the global economy is recovering.

Rio Tinto Ltd., the world’s third-biggest mining company, surged 12 percent after saying it will sell shares and form a joint venture with BHP Billiton Ltd. instead of pursuing an investment from Aluminum Corp. of China. BHP, the world’s biggest mining company, climbed 10 percent. Cnooc Ltd., China’s biggest offshore oil producer, rallied as oil prices rose.

“Positive economic numbers, particularly from China, should provide a further leg up for this rally,” said Khiem Do, head of multi-asset strategy at Baring Asset Management (Asia) Ltd. in Hong Kong, which oversees $7 billion. “Risk appetite is coming back with a vengeance.”

The MSCI Asia Pacific Index advanced 1.3 percent to 103.33 in Tokyo. The gauge, which has surged 47 percent since falling to a more than five-year low on March 9, briefly pared gains after Yonhap News reported on June 2 that North Korea was preparing to launch a medium-range missile.

South Korea’s Kospi index fell 0.1 percent, dropping for a second week as concerns North Korea will step up military tests outweighed signs the global recession is abating.

“The equity market has had such massive gains that it’s ripe for any excuse to trigger a sell-off,” said Nader Naeimi, an investment strategist at AMP Capital Investors in Sydney, which manages about $95 billion. “Geopolitical worries could be one of them.”

Best Performers

Mining and energy companies are the best performers of the MSCI Asia Pacific Index’s 10 industry groups in the past month as prospects of a global recovery fueled optimism that demand for commodities will increase.

China’s Federation of Logistics and Purchasing said on June 1 that its Purchasing Manager’s Index, a gauge of the country’s manufacturing industry, expanded for a third month. That spurred confidence that Premier Wen Jiabao’s 4 trillion yuan ($586 billion) stimulus package is working to boost the Chinese economy, the world’s biggest importer of commodities. more...