By Masaki Kondo and Paul Gordon July 21 (Bloomberg) -- Asian stocks rose, lifting the MSCI Asia Pacific Index to a nine-month high, after Australia’s treasurer said the global economy may have bottomed and Goldman Sachs Group Inc. raised its Standard & Poor’s 500 Index forecast. Fairfax Media Ltd., Australia’s No. 2 newspaper owner, surged 5.9 percent, while James Hardie Industries NV, the biggest seller of home siding in the U.S., climbed 6.5 percent in Sydney as Treasurer Wayne Swan said he wasn’t planning more cash handouts to households. Mitsubishi Corp., a Japanese trading company that gets more than half its revenue from resources, jumped 5.5 percent as oil and metals prices advanced. “I think the recession is clearly over. Confidence is back,” Chong Yoon Chou, Singapore-based investment director at Aberdeen Asset Management Asia Ltd., which has $27 billion of assets, said in an interview on Bloomberg Television. “What we’ve seen in the last quarter is that things are getting started again and orders are coming back.” The MSCI Asia Pacific Index added 1.5 percent to 106.37 as of 5:24 p.m. in Tokyo, headed for a sixth gain and the highest close since Oct. 2. The gauge has climbed 51 percent from a five-year low on March 9 amid optimism stimulus policies worldwide will revive the global economy. The Nikkei 225 Stock Average climbed 2.7 percent in Japan, where stock markets were closed yesterday, while South Korea’s Kospi Index rose 0.7 percent. Hyundai Motor Co. gained 3.6 percent after Morgan Stanley lifted its share-price estimate. New Zealand’s NZX 50 Index advanced 1.9 percent. Sky City Entertainment Group Ltd., the country’s biggest casino operator, surged 6.6 percent after saying annual profit more than doubled. Harvey Norman Australia’s S&P/ASX Index closed little changed. Harvey Norman Holdings Ltd., the nation’s largest electronics retailer, sank 6.1 percent, the sharpest decline on the MSCI World Index, after reporting sales growth that missed analyst estimates. Futures on the S&P 500 dipped 0.1 percent. The gauge climbed 1.1 percent to 951.13 in New York yesterday as David Kostin, Goldman Sachs’ U.S. strategist, boosted his year-end estimate for the measure to 1,060 from 940. Commercial lender CIT Group Inc. soared 79 percent on speculation the company had reached a financing agreement with bondholders. Fairfax surged 5.9 percent to A$1.345 in Sydney, and rival West Australian Newspapers Holdings Ltd. jumped 9.8 percent to A$5.37 as Treasurer Swan told reporters today that the worst of the global recession “may be behind us.” Australia’s benchmark interest rate at a half-century low of 3 percent is helping drive economic growth, the central bank said. U.S. Sales James Hardie, which gets more than three-quarters of its revenue in the U.S., surged 6.5 percent to A$4.62 in Sydney. Doosan Infracore Co., South Korea’s largest maker of construction equipment, jumped 8.7 percent to 15,550 won. Honda Motor Co., Japan’s No. 2 automaker, rose 3 percent to 2,550 yen after saying it will increase overtime at two plants in the country to meet demand. Goldman’s Kostin cited stronger-than-expected earnings for his S&P 500 upgrade. The MSCI Asia Pacific Index last week had its biggest weekly advance since May as Intel Corp. forecast sales that beat analyst estimates and International Business Machines Corp. raised its profit target. Earnings topped analysts’ estimates by an average of 15 percent for S&P 500 companies that reported quarterly results since July 8, according to data compiled by Bloomberg. “The earnings recovery of U.S. companies is following a familiar pattern of conservative guidance being beaten and giving rise to a relief rally,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd. in Tokyo, which manages $28 billion. Sovereign Wealth Fund Morgan Stanley raised its estimate for the Kospi index by 23 percent yesterday. Korea Investment Corp., the country’s $30 billion sovereign wealth fund, said today it will increase the equities allocation in its portfolio later this year and target additional investments in the U.S. and Asia. “We think it’s unlikely that bonds are going to continue to outperform stocks from here over the long term,” Chief Investment Officer Scott Kalb said today in an interview in Seoul. “We’re moving more towards equity.” The MSCI Asia Pacific Index’s rally has lifted average valuations of shares in the benchmark gauge to 24 times estimated earnings, and 1.5 times book value, up from 14 times and 1.2 times respectively at the start of the year. Japan’s Topix index gained 2.7 percent, led by metals producers and trading companies. Sumitomo Metal Mining Co., Japan’s top nickel producer, leapt 9.1 percent to 1,396 yen and Mitsubishi, the nation’s largest trading house by market value, added 5.5 percent to 1,793 yen. Economic Growth A gauge of six metals in London climbed for a sixth session yesterday, the longest stretch since March 2006. Crude oil extended its gain to a fourth session and fell as much as 0.5 percent today. Commodity prices have risen in the past week amid optimism a global recovery will boost demand for commodities. Government reports last week showed economic growth accelerated in China and U.S. manufacturing improved. The U.S. Federal Reserve is “confident” of its ability to stem inflation after what’s likely to be an “extended period” for policies aimed at restarting lending, Chairman Ben S. Bernanke wrote in an opinion piece in the Wall Street Journal. Hyundai Motor, South Korea’s biggest carmaker, rose 3.6 percent to 83,700 won after Morgan Stanley lifted its target price to 101,000 won from 88,000 won. Hyundai Motor’s market- share gain has been “impressive” in the U.S., Western Europe, China and India, the brokerage said. Higher Profit Sky City climbed 6.6 percent to NZ$3.05. Net income was as much as NZ$116 million ($76 million) for the year ended June 30 from NZ$49.9 million a year earlier, Sky City said in a preliminary report. The result exceeded forecasts in April, when Sky City said it expected net income to be within a range of NZ$99 million to NZ$106 million. Harvey Norman sank 6.1 percent to A$3.26. Total sales increased 4.5 percent to A$1.49 billion ($1.2 billion) in the three months ended June, the company said. Revenue from stores open at least a year rose 2 percent, missing the 5 percent median estimate of analysts in a Bloomberg News survey. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Paul Gordon in Hong Kong at pgordon6@bloomberg.net.

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