By Clyde Russell and Shani Raja Feb. 2 (Bloomberg) — Asian stocks climbed from a two-month low and oil gained after a report showed U.S. manufacturing expanded more than estimated and as commodity prices advanced. The Australian dollar dropped after the central bank unexpectedly left interest rates unchanged. The MSCI Asia Pacific Index gained 0.7 percent to 117.11 as of 1:22 p.m. in Tokyo following a 1.4 percent increase in the Standard & Poor’s 500 Index yesterday in New York. S&P 500 futures fell 0.3 percent. Crude oil rose for a second day, jumping as much as 1.4 percent while copper added 0.7 percent. U.S. manufacturing expanded in January at the fastest pace since August 2004, boosting confidence that the economy is recovering from the worst recession since World War II. Australia’s central bank unexpectedly kept its benchmark interest rate unchanged, ending a streak of three consecutive increases, to gauge the strength of an economic recovery. “Markets overall were as oversold as they had been for some months and a bounce was expected,” Prasad Patkar , who helps manage $1.5 billion at Platypus Asset Management in Sydney. “The world is a markedly better place, in an economic sense, than it was 12 months ago so there is good reason to believe the market will stay bid.” Japan’s Nikkei 225 Stock Average advanced 1.1 percent to 10,358.34. Australia’s S&P/ASX 200 Index climbed 1.2 percent. Canon, BHP Rise Canon Inc., which gets 28 percent of revenue from the Americas, added 1.9 percent in Tokyo. BHP Billiton Ltd. , the world’s largest mining company, rose 3.1 percent in Sydney. Toyota Motor Corp. gained 4.6 percent after saying it will resume some production operations that were halted following an accelerator pedal problem in 2.3 million vehicles. The Institute for Supply Management’s factory index rose to 58.4, exceeding the highest estimate in a Bloomberg News survey of economists. Readings greater than 50 signal expansion. Incomes climbed 0.4 percent, also more than expected, according to the Commerce Department in Washington. The Australian dollar fell as much as 1.2 percent to 88.08 U.S. cents and two-year bonds rose after Reserve Bank of Australia Governor Glenn Stevens left the overnight cash rate target at 3.75 percent in Sydney. All 20 economists surveyed by Bloomberg News forecast a quarter-point boost. Futures traders estimated a 74 percent chance of an increase. The decision suggests Stevens and his board may keep borrowing costs unchanged in coming months to gauge the economic impact of previous increases. Business confidence, particularly among retailing companies, fell in December to the lowest level in six months, a report showed today. Australian Pause “The decision will bring the currency back to a degree, but the Reserve Bank hasn’t gone away,” said Stephen Roberts , a senior economist at Nomura Australia Ltd. in Sydney. “This is purely a pause, certainly not a sign that they’re finished.” The yen reversed losses against the euro after the Australian rate decision, trading at 125.92 against the euro. It pared its decline against the dollar, trading at 90.68. Crude oil extended gains in New York after rising the most in four weeks yesterday as the U.S. manufacturing data boosted optimism that fuel use in the world’s biggest energy-consuming country will gain. Oil for March delivery gained as much as $1.01 to $75.44 a barrel in electronic trading on the New York Mercantile Exchange. “We can see that manufacturing is improving,” said Jonathan Barratt , managing director at Commodity Broking Services Pty in Sydney. “We now want to see that number backed up with good fundamentals in the inventory data.” Copper, Bond Risk Copper climbed from a 10-week low in Shanghai, as recent declines lured buyers from China, the world’s largest consumer. The May-delivery contract on the Shanghai Futures Exchange rose as much as 1.9 percent to 55,490 yuan ($8,128) a ton, after plunging to the lowest level since Nov. 19 yesterday. The cost of protecting Asian corporate and sovereign bonds from non-payment dropped, according to traders of credit-default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan fell 3.5 basis points to 111.5 basis points, Citigroup Inc. prices show. A decline would be the risk benchmark’s first since Jan. 25, when it fell 4.7 basis points, according to prices from CMA DataVision in New York. To contact the reporters for this story: Clyde Russell in Singapore at crussell7@bloomberg.net ; Shani Raja in Sydney at sraja4@bloomberg.net .
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Asian Stocks, Metals Advance on U.S. Manufacturing; Australia Dollar Falls
