SINGAPORE (Bloomberg) -- Asian stocks advanced, led by financial and technology companies, after China Merchants Bank Co. forecast higher profits and as investors speculated recent losses were excessive.

China Merchants, the nation’s most profitable bank, rallied the most in three months. Trend Micro Inc., a Japanese anti-virus software developer, and Sun Hung Kai Properties Ltd., Hong Kong’s largest property company, jumped on brokerage upgrades. Mizuho Financial Group Inc. and Mitsubishi Estate Co. led a rebound in Japan after the Nikkei 225 Stock Average ended 12 days of declines, the longest losing streak in 54 years.
“Chinese banks will have assured earnings growth for the first half and the third quarter,” said Mona Chung, a Hong Kong- based fund manager at Daiwa Asset Management Ltd., which oversees more than $2 billion. “Property stocks were oversold and their valuation has now come to a more reasonable level.”
The MSCI Asia-Pacific Index gained 0.5 percent to 133.47 at 2:45 p.m. Tokyo time, after earlier dropping 0.6 percent. Financial companies were the biggest contributors to the benchmark’s advance.
MSCI’s Asian Index has lost 15 percent this year, following its worst first-half slump since 1992. The index is valued at about 14 times earnings, the cheapest since March.
Japan’s Nikkei 225 added 1 percent to 13,372.61, halting a 12-day, 8.4 percent slump that was the longest retreat since 1954, when the end of the Korean War caused a decrease in Japanese industrial sales to the U.S. military. China’s CSI 300 Index jumped 4.5 percent, set for its largest gain in three weeks.
U.S. markets were closed for trading on July 4 for the Independence Day holiday. Futures for the Standard & Poor’s 500 Index expiring in September rose 0.5 percent recently.
-----Chinese banks
China Merchants, the country’s most profitable bank, rose 6.1 percent to HK$24.25 in Hong Kong, poised for its largest gain since April 2. The company said first-half profit may have more than doubled as it extended more loans. The shares jumped 6.2 percent to 22.60 yuan in Shanghai.
China Citic Bank, the banking unit of China’s largest investment firm, gained 3.5 percent to HK$4.43 in Hong Kong and advanced 5.2 percent to 5.50 yuan in Shanghai. The bank said it expected first-half profit to rise more than 150 percent on higher interest revenue.
An index of Chinese financial stocks, which includes developers, has dropped 48 percent this year, the second-biggest decline among 10 industry groups on the CSI 300.
“Fundamentals are very strong in China compared to any other Asian nation,” Liu Yang, managing director at Atlantis Investment Management Ltd. in Hong Kong, which oversees about $4 billion in assets, said in a Bloomberg Television interview.
-----Developers gain
Guangzhou R&F Properties Co., the biggest developer in the southern Chinese city, rose 11 percent to HK$15.48 in Hong Kong, on course for its largest gain since Feb. 1. Shimao Property Holdings Ltd., a developer controlled by billionaire Xu Rongmao, increased 9.9 percent to HK$9.53.
The People’s Bank of China, the Ministry of Housing and Urban-Rural Development and other ministries held consultations on stabilizing the property market, the Chinese-language Economic Observer reported in its July 7 edition.
China’s property sales are slowing as the government restricts bank lending to counter accelerating inflation. China Vanke Co., the country’s largest publicly traded real-estate developer, on Monday reported a 22.8 percent drop in apartment sales last month from a year earlier.
Sun Hung Kai rallied 4.2 percent to HK$109.30, poised for its largest gain since April 2. Credit Suisse Group raised its rating on the stock to “outperform” from “neutral,” saying that recent declines have more than accounted for weakening property demand.
--------Mizuho, Sumitomo Realty
Mizuho, Japan’s third-largest publicly traded bank, jumped 4.8 percent to 506,000 yen. Mitsubishi Estate, Japan’s No. 1 developer by market value, added 3.2 percent to 2,450 yen. Sumitomo Realty & Development Co., the nation’s No. 3 developer, rose 4.8 percent to 2,175 yen.
Shares on the Topix traded at 16.3 times earnings for the last business year, lower than the 20.8 ratio of the Standard & Poor’s 500 Index in the U.S. and 20.3 for China’s CSI 300 Index, based on Bloomberg data. The price-to-book value of the Topix is 1.4, or less than half of that for the CSI 300.
Trend Micro gained 3.2 percent to 3,600 yen after Mitsubishi UFJ Securities Co. raised its rating on the shares to “strong outperform” from “outperform,” citing recent share price declines and the prospect earnings will beat expectations in the second quarter. The stock fell 18 percent from a recent high on April 22 through July 4.
------Mining companies
In Sydney, Minara Resources Ltd. slumped 13 percent to A$2.59 as Macquarie Group Ltd. downgraded shares of Australia's No. 2 nickel producer to “underperform” from “neutral,” citing rising sulfur costs and the outlook for earnings.
A measure of six metals traded on the London Metal Exchange dropped 1.5 percent on July 4. Zinc declined 0.5 percent, copper 2 percent and nickel 1.2 percent.
BHP Billiton Ltd. lost 2.2 percent to A$39.81. Rio Tinto Group, the world’s third-largest mining company, slipped 2.2 percent to A$122.93. PT International Nickel Indonesia, the nation’s biggest producer of the metal, lost 1.7 percent to 5,750 rupiah.