Asia gains on Fed buzz

GLOBAL MARKETS/ STOCK REPORT

Asian stocks rose, led by Toyota Motor and Samsung Electronics, on expectations that the US Federal Reserve will cut interest rates to support growth in the region's largest export market.

Toyota and Samsung climbed to their highest in about two weeks after Fed Vice-Chairman Donald Kohn said policymakers must be "flexible and pragmatic" in response to a credit market "deterioration."

Mitsubishi UFJ Financial Group led banks higher. Sino Land paced gains among Hong Kong developers on speculation that the city's borrowing costs will follow US rates lower, boosting demand for real estate.

The MSCI Asia Pacific Index climbed 2.5 per cent to 160.62 at 5:22 pm in Tokyo, with all 10 industry groups advancing. Japan's Nikkei 225 Stock Average jumped 2.4 per cent.

Hong Kong's Hang Seng Index rose 4.1 per cent, extending gains after a Chinese official said the country will proceed with a plan allowing individual purchases of the city's stocks. All markets advanced in the region except in Vietnam and Sri Lanka.

Concerns that losses tied to US sub-prime mortgages are spreading and that the US economy is slowing helped drag the MSCI Asia Pacific down by 6.7 per cent from its November 1 record. The Nikkei has lost 8 per cent in that time.

EUROPE
European stocks rose, led by Fortis, Credit Suisse Group and BP Plc.

The Dow Jones Stoxx 600 Index added 0.2 per cent to 364.88 as of 10:28 am in London. The Stoxx 50 increased 0.3 per cent, while the Euro Stoxx 50, a measure for the euro region, advanced 0.5 per cent.

Fortis climbed 2.9 per cent to 18.69 euros after China's Ping An Insurance Co bought a stake in Belgium's biggest financial company.

Credit Suisse, Switzerland's second-largest bank, advanced 1.8 per cent to 67.6 francs.

US
US stock-index futures retreated after Goldman Sachs said home-equity losses may rise 50 per cent to 100 per cent next year, and on speculation a report on Thursday will show the housing slump is deepening.

Lehman Brothers, the fourth-biggest US securities firm, dropped in Europe after CIBC World Markets cut its share-price estimate by 17 per cent, saying credit turmoil will last.

Washington Mutual, the largest US savings and loan, also slipped. H J Heinz, the world's biggest ketchup maker, sank before reporting quarterly earnings.

Standard & Poor's 500 Index futures expiring in December lost 5.3 points to 1,465.5 as of 9:58 am in London. Dow Jones Industrial Average futures dropped 39 points to 13,268. Nasdaq-100 Index futures decreased 6.25 points to 2,089.25.

US stocks posted the biggest two-day rally in five years as of the close on Wednesday, led by financial shares, after Federal Reserve Vice-Chairman Donald Kohn raised expectations of an interest-rate cut.

A report on Wednesday may show that purchases of new homes in the US fell in October. Investors will also be looking to a report on third-quarter economic growth.