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Toyota and TSMC lead Asian markets

Asian stocks gained for a second week after economic reports added to optimism that US growth will fuel demand for Asian-made products. Hyundai Motor Co and Taiwan Semicon-ductor Manufacturing Co (TSMC, 台積電) advanced.

Toyota Motor Corp surged after raising its global vehicle sales forecast and after an industry report showed that it and Nissan Motor Co led US vehicle sales in October.

"The US is recovering for sure," said Kunihiro Shimizu, who helps manage US$2.5 billion at Meiji Dresdner Asset Management Co in Tokyo. "Automakers will continue to perform well in US markets as long as consumer demand there remains strong."

Morgan Stanley Capital International's Asia Pacific Index rose 0.4 percent in the past five days, adding to last week's 1.7 percent advance. South Korea's Kospi index gained 2.8 percent.

Japan's Nikkei 225 Stock Average added 0.7 percent.

Sri Lanka's Colombo All Share Index tumbled after President Chandrika Kumaratunga dissolved parliament Tuesday and declared a state of emergency. Australian banks fell after the central bank unexpectedly raised its benchmark interest rate to cool a home-lending boom.

Government and industry reports in Asia and the US fueled optimism about the outlook for the region's exporters.

South Korea last Saturday said the nation's exports rose to a record in October, helping Hyundai Motor Co, the country's largest automaker, climbed 4.7 percent to 4000 won.

TSMC advanced 3 percent to NT$69. The world's largest supplier of made-to-order computer chips counts on exports to the US for about three-quarters of its revenue.

Singapore's Chartered Semiconductor Manufacturing Ltd (特許), the world's fourth-largest supplier of made-to-order chips, advanced 3.5 percent to S$1.77.

Toyota, the world's third-largest automaker, surged 10 percent to ¥3450 this week. The company, which makes about 80 percent of its operating profit in North America, reported a second-quarter profit that beat some analysts' estimates and increased its forecast for global vehicle sales.

"Toyota is a money-making machine," Scott McGlashan, who manages the equivalent of US$125 million as chairman of Jade Absolute Fund Managers in London, said Thursday. "I am very impressed."

Nissan, Japan's third-largest automaker, climbed 6.1 percent to ¥1307. The company relies on the US for about 80 percent of its operating profit.

Sri Lanka's Colombo benchmark stock index plunged 18 percent in the three days from Tuesday when President Kumaratunga dissolved parliament, fired three government ministers and ordered soldiers to guard at public installations while the prime minister was away.

Kumaratungam leads the opposition People's Alliance party and disapproves of the government's handling of peace talks with Tamil rebels. The index rebounded by 12 percent Friday after Prime Minister Ranil Wickremesinghe returned home from the US and vowed to recall the suspended parliament.

Australia and New Zealand Banking Group Ltd, the nation's third-largest, slumped 8.5 percent to A$16.29. It led a decline by banks in Asia's fifth biggest economy on concern the interest rate increase would lower demand for credit.

National Australia Bank Ltd, the nation's largest lender by assets, shed 1.8 percent to A$30.03. The central bank increased the key interest rate to 5 percent from 4.75 percent, prompting UBS Warburg to lower the country's banks to "underweight" from "neutral" on Thursday.

The recommendation means that investors should hold fewer bank stocks than are represented in their benchmark index.

In Japan, banks such as Mizuho Financial Group Inc fell partly on concern that the country's ruling Liberal Democratic Party may lose its majority in Sunday's lower house general election, giving power to the Democratic Party of Japan, which is advocating a tougher government stance on bank reform.

Mizuho Financial Group Inc, Japan's largest bank by assets, tumbled 7.1 percent to ¥19,000. Sumitomo Mitsui Financial Group Inc, the nation's No. 2 lender, lost 4.7 percent to ¥527,000.

"The election is a concern for the market in that the LDP may lose its majority, which may change the policy stance," said Akio Yoshino, who helps manage the equivalent of US$15 billion in assets at SG Yamaichi Asset Management Co in Tokyo.

"What the Democratic Party has in mind for rebuilding the financial system looks a lot more rigorous than what banks have planned," Yoshino said.
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