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Asian Stocks End Higher; Nikkei Gains 1%

The Associated Press

HONG KONG -- Asian stocks advanced Friday, with resource companies gaining as oil prices broke above $69 and mining giants Rio Tinto (RTP Quote)and BHP Billiton (BHP Quote) announced a partnership. Japan's Nikkei index rose to an eight-month high.

But investors tread cautiously ahead of a key U.S. jobs report that could bring more signs of recovery -- or weakness -- in the world's largest economy and its consumers, whose spending is critical for Asian exporters.

Investors were comforted by news Thursday that the number of American workers continuing to receive unemployment benefits unexpectedly fell for the first time in 20 weeks.

That augured well for the government's monthly tally of job losses, a critical report on non-farm payrolls due later Friday that could provide more clues to the health of the U.S. economy.

Still, optimism about any nascent recovery is pervasive in the market, and some analysts say stocks could push higher even if the figures disappoint -- building on a powerful rally that has lifted many markets in Asia 30% or more in just the last three months.

"We're still cautious, but more and more people are turning positive about the economy," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. "I think that confidence will be hard to shake in the short term."

In Japan, the Nikkei 225 stock average rose 1%, to 9,768.01. Higher oil prices lifted stocks like Nippon Oil and Idemitsu Kosan.

Shares of automakers and electronics companies also posted strong gains as the yen weakened against the dollar. Mazda Motor surged 10.4%.

In Hong Kong, the benchmark Hang Seng gained almost 1% in seesaw trading,while South Korea's Kospi took back its losses to add 1.2%.

In Australia, the main index advanced 0.9%, led by gains over 8% in shares of Rio Tinto and BHP.

Rio Tinto said Friday it was scrapping its $19.5 billion deal with Chinese company Chinalco(ACH Quote), choosing instead to raise $15.2 billion in a share sale and setting up a joint production venture with rival BHP comprising all of their iron ore assets in Western Australia state.

Investors reacted positively, surmising the sale would help Rio pay down its debts as the partnership saves the two companies billions and gives them greater leverage over pricing.

In the U.S. Friday, the payroll report is expected to show the country shed some 520,000 jobs in May, which would mark the second straight month that job losses slowed. The unemployment rate is seen rising from 8.9% in April to 9.2% in May -- possibly the highest since September 1983, when the U.S. was recovering from a severe recession.

In New York Thursday, traders betting on a recovery piled into banks and energy firms, and the Dow Jones Industrial Average rose 74.96, or 0.9%, to 8,750.24. The broader S&P 500 index rose 10.70, or 1.2%, to 942.46.

Wall Street futures pointed to a higher open Friday.

Stocks in London, Frankfurt and Paris were trading higher.

Oil prices climbed toward $70 a barrel, with benchmark crude for July delivery up 39 cents to $69.20 a barrel. On Thursday the contract shot up $2.69.

In currencies, the dollar gained to 96.73 yen from 96.63 yen, and the euro strengthened to $1.4197.