By Linus Chua and Weiyi Lim March 2 (Bloomberg) -- Asian stocks rose to the highest in five weeks as gains in U.S. consumer spending, South Korean exports and lower unemployment in Japan signal faster economic growth. The Australian dollar and pound declined. The MSCI Asia Pacific Index added 0.6 percent to 119.64 at 4:15 p.m. in Tokyo, the highest since Jan. 25, and the cost of protecting bonds in the region from default fell. The so-called Aussie dropped from a one-week high as the central bank signaled it will slow the pace of interest rates increases. The pound dropped for a sixth day versus the dollar, and futures on the Standard & Poor’s 500 Index were little changed, while those for the Dow Jones Euro Stoxx 50 rose 0.3 percent. U.S. consumer spending, South Korean exports increased for a fourth straight month, India’s manufacturing output gained the most in 1 ½ years, while Japan’s unemployment rate unexpectedly slid in January, one of the first signs that a rebound in overseas shipments is benefitting workers. The data lifted investor optimism for stable economic growth. “We are expecting global recovery to come through, and this should be a reasonable backdrop for stocks,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, which oversees $90 billion. “Economic indicators have been consistent, showing a gradual recovery.” South Korea’s Kospi Index climbed 1.3 percent. New Zealand’s NZX 50 Index advanced 0.6 percent. India’s Bombay Stock Exchange’s Sensitive Index, or Sensex, added 1.6 percent to a one-month high. Emerging Markets Indian stocks may “outpace” other emerging markets amid an improvement in the nation’s economic outlook, according to Mark Mobius, chairman of Templeton Asset Management Ltd., which manages $34 billion in developing-nation assets. Tata Motors Ltd. rose 9.7 percent, the most in six months and the best performer on the MSCI Asia Pacific Index today after India’s biggest truckmaker said February sales jumped 58 percent. Technology companies gained the most among the 10 industry groups in the MSCI Asia Pacific Index. South Korea’s Samsung Electronics Co., the world’s biggest maker of computer memory chips, climbed 3.5 percent. Toshiba Corp., Japan’s biggest memory-chip maker, rose 2 percent. Taiwan Semiconductor Manufacturing Co., the world’s biggest maker of customized chips, gained 0.5 percent. Hong Kong’s Hang Seng Index lost 0.8 percent, led by HSBC Holdings Plc, which slumped 7 percent after the bank reported lower-than-estimated profit. Australia’s Rates The currency earlier climbed to 90.31 U.S. cents, its strongest level since Feb. 23, after Governor Glenn Stevens raised the benchmark rate to 4 percent from 3.75 percent in a decision forecast by 14 of 19 economists surveyed by Bloomberg News. The S&P/ASX 200 Index pared gains of as much as 0.6 percent, rising 0.3 percent after the rate increase. “Reading through the statement clearly indicates that the RBA is going to continue with a gradual approach, which was seen as a little dovish,” said David Forrester, a currency strategist at Barclays Capital in Singapore. Australia’s currency fell to 89.71 U.S. cents in Sydney from 89.85 cents before the rate decision and 90.09 cents in New York yesterday. New Zealand’s dollar weakened to 69.44 U.S. cents from 69.97 cents yesterday. The cost of protecting bonds in the Asia-Pacific region from default fell. The Markit iTraxx Australia index dropped 2 basis points to 89.5, according to Citigroup Inc. The Markit iTraxx Japan index lost 2 basis points to 140, Morgan Stanley prices show. Bond Risk The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan fell 1.5 basis points to 109 basis points, according to Citigroup Inc. Credit-default swap indexes are benchmarks for protecting bonds against default, and a drop shows improving perceptions of credit quality. “The market is becoming comfortable that the U.S. recovery is in place,” said Tim Schroeders, who helps manage about $1.1 billion at Pengana Capital Ltd. in Melbourne. “There is still a pervading caution given the volatility in markets.” The pound dropped after polls showed Britain may have its first minority government since 1974 and ahead of a report forecast to show that a recovery in consumer confidence stalled in February. The pound was at $1.4867 in Tokyo from $1.4991 in New York yesterday when it dropped to $1.4784, the lowest level since May 1. It was at 90.89 pence per euro from 90.47 pence yesterday after reaching 91.50, the weakest since Dec. 1. Copper Dips Copper for three-month delivery dropped 1.6 percent to $7,281 a metric ton as Codelco and Anglo American Plc ramped up output in Chile after power was restored following the Feb. 27 earthquake. Codelco, the world’s largest copper producer, said it will be able to make up for “minor” production losses at its mines later this year. Oil traded below $80 a barrel in New York as the dollar gained, before a report that is expected to show U.S. crude supplies increased for a fifth week, signaling demand from the world’s biggest energy consumer may be slowing. Oil was trading at $78.56 a barrel after dropping 1.2 percent yesterday as the dollar advanced against the euro, making investments in dollar-denominated commodities less attractive. Crude inventories in the U.S. probably rose 0.5 percent last week, according to a Bloomberg News survey before an Energy Department report this week. To contact the reporters for this story: Linus Chua at lchua@bloomberg.net; Weiyi Lim in Taipei at wlim26@bloomberg.net

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