Oct. 21 (Bloomberg) -- Asian stocks climbed, led by producers of raw materials and consumer goods, as optimism grew governments will expand efforts to boost economic growth.

Rio Tinto Ltd. gained 12 percent and Honda Motor Co., which gets more than half its sales in North America, advanced 6.8 percent after Federal Reserve Chairman Ben S. Bernanke said he'd back a stimulus package. Hyundai Development Co. added 4.8 percent after a newspaper said South Korea will aid builders. Woodside Petroleum Ltd. jumped 11 percent after OPEC signaled it may cut oil output. Indonesia's PT Bank Ekonomi Raharja surged 10 percent after HSBC Holdings Plc bought a controlling stake.

``Confidence is coming back into the markets,'' said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors, which manages about $108 billion. ``There's more risk appetite now and investors are buying back extremely depressed assets.''

The MSCI Asia Pacific Index climbed 2.2 percent to 92.59 as of 7:13 p.m. in Tokyo, rising for a third day, its longest winning streak since July 24. The gauge is down 41 percent this year, set for its worst annual performance since the index was created in 1987, as credit market turmoil toppled financial institutions and slowed global economic growth.

The slump has brought valuations on the index to 10.4 times reported earnings, near a record low reached earlier this month. That compare with 19.5 times for the U.S. Standard & Poor's 500 Index.

Japan's Nikkei 225 Stock Average added 3.3 percent to 9,306.25, extending its advance from a five-year low on Oct. 10 to 12 percent. India's Sensex Index jumped 4.5 percent, the biggest gain in the region, as ICICI Bank Ltd. surged after regulators said they may limit short-selling.

Money Markets

Money-market rates fell. Hong Kong's interbank dollar loan rate, known as Hibor, dropped 31 basis points, a third day of declines and the longest streak in a month.

Hong Kong's Hang Seng Index declined 1.8 percent. Citic Pacific Ltd., a unit of China's biggest investment company, plunged 55 percent after saying it may lose $2 billion on currency bets. China Mobile Ltd. slumped 5 percent after reporting profit that missed analyst estimates.

Futures on the S&P 500 fell 1.3 percent. The index jumped 4.8 percent yesterday, paring its annual decline to 33 percent, after Halliburton Co.'s profit topped estimates and Exelon Corp. offered $6.2 billion for NRG Energy Inc.

A measure of energy stocks on MSCI's Asian index surged 3.7 percent, the second-biggest rise among 10 industries. The shares trade at 9.2 times reported earnings, near a seven-year low.

Crude Gains

Australia's two biggest oil producers led the gains as crude rose for a third day. BHP Billiton Ltd. jumped 11 percent to A$29.31, while Woodside climbed 11 percent to A$42.52.

Crude oil gained as much as 1.9 percent to $75.69 on signs the Organization of Petroleum Exporting Countries may cut output to halt a 50 percent drop in prices since July. The November contract recently fell 1 percent to $73.50. Gold and platinum prices advanced in New York, while copper declined.

Mitsui & Co., Japan's second-largest trading company and which generates more than half its profits from commodities dealing, surged 7.5 percent to 1,074 yen after JPMorgan Chase & Co. raised the shares to ``buy.'' Rio Tinto Group, which is fending off a $70 billion hostile bid from BHP Billiton Ltd., increased 12 percent to A$74.36.

Stocks also gained after the Fed's Bernanke said lawmakers should consider new measures to improve access to credit for consumers, homebuyers and businesses, and Japan's government was reported to be finalizing an economic stimulus package that includes tax cuts.

Honda added 6.8 percent to 2,435 yen. Canon Inc., the world's largest seller of digital cameras, jumped 5.5 percent to 3,460 yen.

`Taking Notice'

Japan's ruling parties have agreed to a 2 trillion yen ($19.6 billion) tax cut for individuals that would save a typical household of four about 65,000 yen per year, according to reports in the Mainichi and Nikkei newspapers.

``Investors are taking notice of the determination by governments to bolster economies,'' said Masaru Hamasaki, a senior strategist at Toyota Asset Management Co., which manages the equivalent of $3.3 billion.

South Korean construction companies advanced after the Korea Economic Daily reported the government will announce a 12 trillion won ($9.1 billion) aid package to the country's builders to help ease a cash squeeze.

Fubon, Citic

Hyundai Development, a home builder, gained 4.8 percent to 30,500. Sungwon Corp., a builder, surged 11 percent to 4,480 won. State-owned Korea Housing Guarantee Co. will buy 2 trillion won of residential projects from builders to help ease a cash crunch, a government ministry said after the close of trading.

Bank Ekonomi, an Indonesian lender to traders and restaurants, surged by its 10 percent trading limit to 2,090 rupiah. HSBC agreed to pay $607.5 million for an 88.9 percent stake in the bank.

Fubon Financial Holding Co., Taiwan's second-largest financial services company, jumped 6.8 percent to NT$20.35 after the Commercial Times said it plans to acquire Jih Sun Financial Holdings Co. Fubon yesterday agreed to buy the local life insurance unit of ING Groep NV for $600 million. Jih Sun also advanced 6.8 percent to NT$2.66.

Corporate bond risk decreased. Markit iTraxx indexes for Japan and Australia that measure the cost of protecting bonds from default declined 5 basis points, spurring confidence the global credit squeeze is abating.

ICICI Bank, India's second largest by assets, gained 4.7 percent to 430.5 rupees. Infosys Technologies Ltd., the country's biggest computer-service provider by market value, added 3.3 percent to 1,339.5 rupees.

Short-Selling

``Stronger'' steps will be taken if necessary to limit short-selling by overseas investors through the use of offshore derivatives, the Securities & Exchange Board of India said in a statement today. Yesterday India's central bank lowered its key repurchase rate for the first time since 2004.

In Hong Kong, Citic Pacific sank 55 percent to HK$6.52, its biggest drop since the shares began trading in 1990. The company ousted two executives and said it would secure a $1.5 billion loan from its parent, after incurring as much as $2 billion in losses following unauthorized bets on the Australian dollar. Citic Pacific bought currency contracts to fund an iron-ore mine.

China Mobile retreated 5 percent to HK$67.55. The world's No. 1 phone carrier by users posted a 26 percent increase in third- quarter profit to 27.8 billion yuan ($4 billion), lower than analysts forecast.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Ian C. Sayson in Manila at isayson@bloomberg.net.

Last Updated: October 21, 2008 06:19 EDT