By Nicolas Johnson and Anna Kitanaka

Asian stocks rose to a one-week high on an increased estimate of technology spending and a gauge of bond risk declined after the European Central Bank said it will extend measures to battle the region’s debt crisis.

The MSCI Asia Pacific Index of equities climbed 1.3 percent to 112.43 at 4 p.m. in Tokyo. The Stoxx Europe 600 increased 0.5 percent to 249.73. The cost of protecting Asia-Pacific corporate and government bonds from non-payment fell the most since May 27. Standard & Poor’s 500 futures were little changed. The euro strengthened, heading for its first weekly gain in three.

Computer-related companies led stocks higher after Acer Inc., the world’s largest vendor of laptop computers, said May sales jumped 45 percent and Taiwan Semiconductor Manufacturing Co., the biggest maker of custom chips, said it’s optimistic about the chip industry and the global economy for the second half of 2010. Asian markets extended a worldwide rally after the ECB raised its economic growth forecast and said it will continue to offer unlimited cash and buy government bonds.

“We’re very much on track in terms of Europe getting through its issues,” said Tim Schroeders, who helps manage about $1.1 billion at Pengana Capital Ltd. in Melbourne. “Overall the signs are encouraging. Investors generally are prepared to take more risk today.”

Advancing stocks beat decliners 8 to 1 in the MSCI Asia Pacific Index, with information-technology companies rising the most among the measure’s 10 industry groups. Japan’s Nikkei 225 Stock Average jumped 1.7 percent, the biggest increase among equity gauges in Asia.

Investor Optimism

“People are now optimistic about the global economy,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “Investors who had avoided risk assets have started buying them.”

Acer climbed 3.1 percent to NT$79.2 in Taipei, its highest level in a week. Taiwan Semi gained 1.9 percent to NT$60.5. Chairman Morris Chang said he is upbeat about the chip industry and the global economy in the second half of this year. The chip market is “still very good,” he said yesterday. Samsung Electronics Co., Asia’s biggest chipmaker, advanced 3.1 percent to 797,000 won in Seoul.

Global sales of microchips will rise 28 percent to $290.5 billion this year, boosted by demand in China and India, compared with a November forecast of 10 percent growth, the Semiconductor Industry Association said yesterday in the U.S.

Commodity Shares Gain

BHP Billiton Ltd., the world’s largest mining company and Australia’s No. 1 oil producer, advanced 2.6 percent to A$38.58 in Sydney and was the biggest contributor to the MSCI Asia Pacific Index. Aluminum Corp. of China Ltd. climbed 3.9 percent for the steepest increase on Hong Kong’s Hang Seng Index.

Crude oil jumped 1.4 percent to $75.48 yesterday in New York, its highest settlement in four weeks, and was at $75.28 today. The London Metal Exchange Index climbed yesterday for a third consecutive day.

The S&P 500 surged 3 percent yesterday on reports of accelerating growth from China, Japan and Australia. S&P futures were little changed before a report today that may show sales at U.S. retailers rose in May at the slowest pace of the year. Purchases increased 0.2 percent following a 0.4 percent April gain, according to the median estimate of 76 economists surveyed by Bloomberg News. Treasuries rose, trimming a weekly decline.

The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan fell 9 basis points to 142 basis points, on course for its biggest daily drop since May 27, according to Royal Bank of Scotland Group Plc and CMA DataVision in New York.

‘Panic Scenario Eliminated’

The euro strengthened to $1.2103 and 110.78 yen, bringing its gain for the week against the dollar to 1.2 percent following two weeks of losses. Against the yen, it’s set to rise 0.9 percent, snapping a six-week decline that was the longest since the euro’s introduction in 1999.

The ECB is buying state debt and pumping unlimited funds into the banking system to support the 16-nation currency. The MSCI World Index tumbled 8 percent and the euro weakened 15 percent against the dollar this year on concern countries from Greece to Spain will struggle to cut deficits and repay debt.

Earlier this week, Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank will act as needed to aid financial stability and economic growth after restarting emergency currency-swaps to help contain Europe’s debt crisis.

“The panic scenario has been eliminated for now and the euro may grind higher,” said Phil Burke, chief dealer for foreign-exchange trading at JPMorgan Chase & Co. in Sydney. “There should be a slightly bullish bias short term.”

source: Bloomberg

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