Asian stocks make gains as US rate concerns ease

Singapore: Asian stocks gained last week, driving up the MSCI Asia Pacific Index by the most in seven weeks as concern eased that the Federal Reserve will raise borrowing costs to curb inflation.

Li & Fung Ltd., which gets 62 per cent of sales from the US, gained 2.9 per cent in Hong Kong as Fed Chairman Ben Bernanke said low interest rates are still needed to boost growth.

Evergreen Marine Corp., Asia's largest container-shipping line, surged 11 per cent in Taipei after boosting freight rates. Woolworths Ltd., Australia's biggest retailer, advanced 4 per cent in Sydney after reporting higher profit and a share buyback.

"Bernanke stuck to the script and emphasised the Fed's commitment to maintaining interest rates at low levels until the economic recovery becomes self-sustaining," said Tim Schroeders, who helps manage about $1.1 billion of equity investments at Pengana Capital Ltd. in Melbourne.

The MSCI Asia Pacific Index gained 2.4 per cent to 118.07 last week, the most since the week ended January 8. The gauge has lost 6.9 per cent from a 17-month high on January 15 on speculation central banks will start withdrawing stimulus measures. It has risen 1.5 per cent this month.

Economic growth

Hong Kong's Hang Seng Index climbed 3.6 per cent last week, the biggest gain in the Asia-Pacific region, as the city's economic growth beat estimates. Sun Hung Kai Properties Ltd., the world's biggest developer by market value, surged 7.7 per cent after winning a land auction. Japan's Nikkei 225 Stock Average rose less than 0.1 per cent to 10,126.03 as the nation's exports and factory output increased.

China's Shanghai Composite Index increased 1.1 per cent, resuming trade after a one-week holiday for the Lunar New Year, as the government said it will extend support for the country's industries amid weak global demand.

The MSCI Asia Pacific Index surged 34 per cent last year as governments worldwide boosted spending and central banks lowered interest rates to help restore economies battered by the global recession. The gauge has fallen about 2.3 per cent this year on signs governments from China to the US and India will tighten lending and withdraw stimulus policies.

Positive outlook