Falling oil prices spark rise in Asia

By Chua Kong Ho  |   2008-7-31  |     NEWSPAPER EDITION

ASIAN stocks rose yesterday, led by drug makers and financial companies, after Taisho Pharmaceutical Co and Matsushita Electric Industrial Co reported better-than-estimated earnings and oil prices fell to a 12-week low.

Taisho surged the most in seven years in Tokyo after Nikko Citigroup Ltd raised its stock rating, Bloomberg News reported. Matsushita, the world's No. 1 consumer-electronics maker, climbed the most in three months. Commonwealth Bank of Australia rallied after Standard & Poor's affirmed its credit rating and corporate bond risk fell. China Petroleum & Chemical Corp and Singapore Airlines Ltd rose as cheaper oil cut fuel costs.

"It has been a challenge to find a bright spot in this negative environment, but falling oil prices could mean the worst is coming to an end," said Lee Wonki, president of KB Asset Management Co in Seoul. "The outlook for corporate earnings looks better."

The MSCI Asia Pacific Index jumped 1.6 percent to 132.25 as of 5:16pm yesterday in Tokyo, the biggest increase since July 21. Four stocks rose for each that declined. All of the index's 10 industry groups advanced, with health care and financial shares posting the largest gains.

Japan's Nikkei 225 Stock Average added 1.6 percent to 13,367.79. Most markets in Asia climbed, with benchmark indexes in Pakistan and the Philippines recording the largest increases.

Posco advanced among steel makers after ArcelorMittal and United States Steel Corp both reported second-quarter profits.