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Market optimism on worldwide measures

ASIAN stocks last week rose for a second week as optimism that government measures worldwide will ease the financial crisis offset cuts in earnings forecasts at Mizuho Financial Group Inc and Hitachi Ltd.

BHP Billiton Ltd and Kawasaki Kisen Kaisha Ltd led gains among mining and shipping companies after China cut some tariffs on raw material and component imports. Mitsubishi UFJ Financial Group Inc led banks lower as rival Mizuho, Japan's second-largest lender, cut its earnings target. Hitachi, which makes electrical equipment, slumped 6.5 percent after forecasting the biggest loss by an Asian electronics maker.

"Fiscal and monetary stimulus policies have helped improve sentiment," Binay Chandgothia, who oversees about US$1.5 billion as chief investment officer at Principal Asset Management Co in Hong Kong, told Bloomberg News. "These measures will benefit the economy although there will be more earnings downgrades."

The MSCI Asia Pacific Index rose 0.4 percent to 83.42 last week, adding to the previous week's 3.5-percent increase. The gauge is down 6.9 percent this year amid mounting signs the global recession has hurt corporate profits.

Toyota Motor Corp, the world's largest car maker, last Friday widened its loss prediction on slowing demand in the United States and in Japan. Mitsubishi UFJ cut its full-year profit forecast after the stock market closed.

The Nikkei 225 Stock Average added 1 percent last week, while Hong Kong's Hang Seng index climbed 2.8 percent. China's Shanghai Composite Index surged 9.6 percent.

Stocks have fallen this year amid mounting signs the financial crisis, which has caused more than US$1 trillion in credit-related losses, is hurting corporate earnings. With banks tightening lending, bankruptcies among Japan's listed companies reached an annual postwar record last year, according to Tokyo Shoko Research Ltd.

Governments around the world are stepping up efforts to ease the crisis that the International Monetary Fund predicts will cause global growth to almost grind to a halt this year. A US Treasury official last week said Secretary Timothy Geithner will make a speech today and President Barack Obama will hold a news conference that will address a stimulus package.

Indonesia's central bank last week lowered its benchmark interest rate for a third straight month. China's government started investing a second allocation of a 4-trillion-yuan (US$586 billion) economic stimulus package.


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