Mining firms and steel makers lift Asian stocks

Asian stocks rose for a third day, led by mining companies and steel makers, on speculation emerging market demand will support raw materials prices and after Lehman Brothers Holdings said Posco may pass on higher costs.

Posco climbed in Seoul after Lehman raised its share-price forecast. BHP Billiton gained in Sydney after copper and zinc rose in London on May 30 for the first time in three days. Mizuho Financial Group Inc led gains in Tokyo on speculation banks will be able to boost profits by raising interest rates.

"Commodities prices will remain rising as long as emerging economies grow," said Hisakazu Amano, head of fund management at T&D Asset Management Company, which oversees the equivalent of $39 billion (Dh143bn) in Tokyo.

"Expectations banks' profitability will improve is prompting investors to buy financial companies."

The MSCI Asia Pacific Index added 1.1 per cent to 151.77 in Tokyo, extending a two-day, 2.1 per cent rally. A measure of raw material suppliers increased 1.7 per cent, the biggest gain among 10 industry groups.

Japan's Nikkei 225 Stock Average climbed 0.7 per cent to 14,440.14, erasing earlier losses of one per cent. Sony Corporation advanced after Goldman Sachs Group Inc upgraded the stock.

About half of the benchmark indexes open for trading gained. Thailand's SET Index posted the region's largest loss after anti-government protesters staged a street rally for the eighth day. US stocks climbed on May 30, sending the Standard & Poor's 500 Index to its second straight monthly gain. S&P 500 futures expiring in June fell 0.2 per cent recently.

BHP Billiton, the world's largest mining company, gained 4.6 per cent to A$45.49, its largest advance since May 14.

Rio Tinto Group, the third biggest, climbed 2.7 per cent to A$141.70.

A measure of six metals traded on the London Metal Exchange, including copper and nickel, snapped a three-day loss, gaining 0.6 per cent on May 30. Zinc rose 1 per cent and copper 0.6 per cent.

Posco, Asia's third-largest steelmaker, advanced 2.9 percent to 575,000 won. Lehman Brothers raised its 12-month price estimate by 16 per cent to 620,000 won in a report, saying the company is likely to follow China Steel Corp in raising prices. JFE Holdings Inc, the world's third-largest steelmaker, advanced 0.8 per cent to 6,010 yen. BlueScope Steel Ltd, Australia's biggest, jumped 2.2 per cent to A$11.60.

Mizuho, Japan's second-largest publicly traded bank by market value, surged 6.7 per cent to 591,000 yen, the highest since December 12. Mitsubishi UFJ Financial Group Inc, the largest, rose 4.7 per cent to 1,129 yen. The 85-member Topix Banks Index climbed 3.9 per cent to its highest since Dec. 13.

Thailand's SET index fell 2.2 per cent to the lowest since March 24 after DBS Vickers Securities (Thailand) Co cut its rating on the nation's shares to "neutral" from "overweight". Anti-government protesters have blocked a road near Prime Minister Samak Sundaravej's office since May 25, opposing his plan to amend the constitution.

European stocks dropped in early trade, ending a three-session rally, as fresh trouble at British lender Bradford & Bingley reignited concerns over the banking sector.

Bradford & Bingley stock tumbled 23 per cent after it said on Sunday its CEO had quit and followed that up on yesterday morning with a gloomy trading update, a restructured rights issue and the sale of a stake to US private equity firm Texas Pacific Group, sparking fears over short-term prospects for the bank and the wider British mortgage market. At 08.51 GMT, the FTSEurofirst 300 index of top European shares had fallen 1.5 per cent to 1,315.02 points. (Agencies)

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