Lower oil saves day for markets

By Chua Kong Ho  |   2008-8-7  |     NEWSPAPER EDITION

ASIAN stocks yesterday rallied the most in more than three months, led by auto makers and electronics manufacturers, on speculation lower oil will slow inflation and spur consumer spending.

Toyota Motor Corp, Japan's largest auto maker, and South Korea's Samsung Electronics Co gained after crude fell for a third day and the Federal Reserve left United States interest rates unchanged, saying price gains will ease.

Sony Corp rose the most in two weeks after saying it will buy Bertelsmann AG's share of their music venture. Commonwealth Bank of Australia led financial companies higher. Hong Kong's market was shut yesterday because of a typhoon.

"Stocks should react favorably to the increasingly dovish monetary policy stances by central bankers around the world," said Prasad Patkar, a trader at Platypus Asset Management in Sydney. "Oil prices are in retreat and the risk of inflation is dissipating."

The MSCI Asia-Pacific Index rose 1.9 percent to 129.63 as of 7:07pm in Tokyo. Japan's Nikkei 225 Stock Average added 2.6 percent to 13,254.89, Bloomberg News said.

Toyota added 3.1 percent to close at 4,640 yen (US$42.85). Samsung Electronics climbed 3.5 percent to end at 587,000 won (US$577).