Ships and electronics bring good cheer to Asian markets

ASIAN stocks rose for the first time in five days, led by Japanese shipping companies and electronics makers, on speculation falling oil prices will ease fuel costs and encourage consumers to spend more.

Shares in the Persian Gulf, Russia and China retreated.

Mitsui OSK Lines Ltd, Japan's biggest iron-ore ship operator, jumped 5.4 percent as crude lost more than 9 percent, sending tanker fuel prices lower.

Panasonic Corp, the world's largest maker of consumer electronics, rose 4.3 percent after United States consumer spending fell less than forecast. Guangdong Electric Power Development Co led Chinese utilities lower on a report they'll have to pay more for coal.

"Cheaper oil will allow Americans to spend more on discretionary items," Yoshinori Nagano, a senior strategist at Tokyo-based Daiwa Asset Management Co, which manages about US$96 billion in Tokyo, told Bloomberg News.

Opposite effect

"Higher fuel costs have eaten into company profit, and with crude falling by this degree, we'll probably see the opposite effect next year," Nagano said.

The MSCI Asia Pacific Index added 0.66, or 0.8 percent, to 87.16 as of 7:30pm in Tokyo, the first advance since December 18.

All but one of the gauge's 10 industry groups advanced.

Japan's Nikkei 225 Stock Average climbed 1 percent to close at 8,599.5. Most markets in the region were closed for the Christmas holiday.

In Russia, OAO Lukoil, the country's second-biggest oil producer, and OAO Surgutneftegaz, the fourth-biggest, led the retreat with declines of more than 2.5 percent. Dubai's benchmark stock index fell for a seventh day on concern economic growth will slow.

China's CSI 300 Index, which tracks yuan-denominated A shares on the mainland's two exchanges, fell 16.31, or 0.9 percent, to 1,870.77, the lowest level since December 2. Thailand's SET Index rose 1.3 percent.

The MSCI Asia Pacific has slumped 45 percent in 2008, the worst annual performance in its two-decade history, as the most severe financial crisis since the Great Depression dragged economies worldwide into recessions.

US consumer spending declined 0.6 percent last month, the Commerce Department said, as cheaper gasoline left Americans with more cash. Economists had expected a 0.7-percent drop.

Prices for energy and raw materials have plummeted as the outlook for the global economy dimmed, providing some cost relief for consumers and manufacturers.

The lower-than-anticipated decline pushed US stocks higher for the first time in three days yesterday, easing concern that the recession will cause corporate revenue to plummet.

Dow Jones

The Standard & Poor's 500 Index added 0.6 percent to 868.15 on Wednesday. The Dow Jones Industrial Average climbed 48.99 points, or 0.6 percent, to 8,468.48.

About 3.63 billion shares changed hands in the US, the least since December 26, 2003, as trading on the New York Stock Exchange and Nasdaq Stock Market ended three hours early before the Christmas holiday.

Crude oil for February delivery sank 9.3 percent to close at US$35.35 a barrel on Wednesday. Oil touched US$32.40 on December 19, the lowest level since February 2004, and has lost almost two-thirds of its value this year.

Mitsui OSK, Japan's second-largest shipping company, climbed 5.4 percent to 547 yen (US$6.05), the first advance since December 15. Nippon Yusen KK, Japan's largest shipping line by sales, added 4.5 percent to 533 yen. A gauge tracking shippers was the biggest winner among 33 industry groups on Japan's broad Topix index.

The average price of 380 Centistoke marine bunker fuel used by ships, has fallen 7.5 percent in Singapore in the past two days. A US$1- change in the price of a metric ton of bunker fuel will change Mitsui OSK's annual pretax profit by as much as 300 million yen.

Panasonic climbed 3.8 percent to 1,071 yen, offsetting Wednesday's 3.1-percent drop. Ricoh Co jumped 4.7 percent to 1,096 yen.