TOKYO (Bloomberg) -- Asian stocks gained for a second day, led by technology companies, on speculation increased takeovers and higher memory-chip prices will help the industry overcome slowing economic growth.

AU Optronics Corp., Taiwan’s largest liquid-crystal-display maker, climbed 2.5 percent after saying it was open to a merger. Hynix Semiconductor Inc., the world’s second-largest maker of computer memory, jumped 3.1 percent as it trimmed investment plans. Nikon Corp., Japan’s largest maker of steppers for semiconductor production, rose 7.1 percent. India’s Reliance Petroleum Ltd. surged 11 percent after it started processing crude oil at a new refinery.
The MSCI Asia Pacific Index added 0.6 percent to 87.66 as of 13:08 p.m. in Tokyo, paring the first weekly decline in three. Markets were closed in Australia, Hong Kong, New Zealand and the Philippines for holidays. Friday and Thursday were Japan’s two slowest full days of trading in the past five years.
“We’re going to see lot of merger and acquisition activities as restructuring goes on at companies that are really sensitive to the economic slowdown,” said Kim Yong Tae, who helps manage about $2.3 billion at Yurie Asset Management Co. in Seoul. “Chipmakers continue to reduce oversupply and that’s positive for the industry.”
About two stocks rose for each that retreated on MSCI’s Asian index, even as government reports showed Japan’s recession deepened in November and China’s central bank governor called for more measures to boost consumer spending. Japan’s Nikkei 225 Stock Average gained 1.6 percent, while China’s CSI 300 Index slipped 0.5 percent.
-------Simultaneous recessions
The U.S. stock market resumes trading on Friday after Thursday’s Christmas holiday. U.S. stocks climbed for the first time in three days on Dec. 24 as consumer spending and orders for durable goods topped economists’ forecasts, easing concern that the recession will cause corporate revenue to plummet.
Stocks worldwide have plunged in 2008, with the MSCI Asia Pacific heading for its worst year on record, as the collapse of the American housing market pulled the U.S., Europe and Japan into their first simultaneous recessions since World War II. Companies on the MSCI gauge are trading at an average 13 times estimated profit, more than a fifth below the level at the start of this year.
“I don’t think you can simply say all the bad news has been discounted by the market,” said Koichi Ogawa, chief portfolio manager at Tokyo-based Daiwa SB Investments Ltd., which manages $28 billion. “We’re still going to see more profit forecast downgrades.”
-------Open-minded
Seven of the MSCI index’s 10 groups rose on Friday.
AU Optronics gained 2.5 percent to NT$22.55. The company will consider all proposals beneficial to shareholders, spokeswoman Yawen Hsiao said on Thursday. Chi Mei Optoelectronics Corp., AU’s closest rival, climbed 3 percent to NT$10.30 after saying it’s “open-minded” to mergers and acquisitions.
Flat-panel makers also rose after Premier Liu Chao-shiuan said Taiwan will help them overcome the economic slowdown.
Hynix gained 3.1 percent to 6,930 won. Elpida, Japan’s largest memory chipmaker, advanced 3.8 percent to 517 yen. Nikon added 7.1 percent to 1,072 yen.
Hynix said on Dec. 24 its investments will likely total 491 billion won ($375 million) during the final three quarters of the year, compared with a previous plan of 646 billion won. Oversupply has caused the price of the benchmark DRAM chip to tumble as much as 69 percent this year, according to Dramexchange Technology Inc., Asia’s biggest spot market.
-------Solar subsidies
Reliance Petroleum surged 11 percent, to 87.80 rupees after it began processing crude oil at the new refinery located in the western state of Gujarat. Reliance Industries Ltd., Reliance Petroleum’s parent company, added 1.3 percent to 1,257 rupees.
Ulvac Inc., a maker of solar-cell manufacturing equipment, jumped 8.2 percent to 1,335 yen in Tokyo, adding to on Thursday’s 19 percent advance. The government said on Dec. 24 it will provide funds to people installing solar panels on their homes.
Kaneka Corp., a synthetic resin maker that said on Thursday it will boost its solar-cell capacity by at least 10 billion yen ($110 million) gained 6.9 percent to 570 yen. Asahi Glass Co., Asia’s largest glassmaker, added 4.5 percent to 487 yen after the Nikkan Kogyo newspaper said the company will spend 5 billion yen on production of solar cell materials.
Dowa Holdings Inc., a Japanese metal refiner and recycler, rose after saying it will repurchase 4 percent of its stock. JFE Holdings Inc., the world’s third-largest steelmaker, slumped after widening planned production cuts.
Dowa rose 3.7 percent to 311 yen in Tokyo. Nitto Boseki Co., a textiles company, surged 17 percent to 149 yen, leading gains on the Nikkei, after saying it will repurchase 17 percent of its outstanding shares.
------Production cuts
JFE, Japan’s second-largest steelmaker, declined 5.7 percent to 2,335 yen. The company, whose shares have lost 58 percent this year, plans to deepen production cuts as demand from automakers and construction companies evaporates. Japan’s crude-steel output will probably drop a record 32 percent to 9.74 million tons in January to March compared with a year earlier, the government said on Thursday.
“The cuts were greater than we had expected and leave something of a negative impression,” Toshiyuki Johno, an analyst at Nikko Citigroup Ltd. in Tokyo, wrote in a report on JFE. “We believe the downswing in real demand is also ongoing.”