Jan. 25 (Bloomberg) -- Asian stocks rose, driving the region's benchmark to its biggest gain in almost a decade, after South Korea's economy expanded faster than estimated and the U.S. moved closer to approving tax rebates.

Bank of Communications Ltd. surged after Morgan Stanley recommended investors buy shares of HSBC Holdings Plc's Chinese affiliate. BHP Billiton Ltd., the world's largest mining company, and PetroChina Co. advanced as copper, gold and crude oil prices rose. The MSCI Asia Pacific Index dropped 0.7 percent this week, even after a 10 percent, three-day rally spurred by the U.S. Federal Reserve's emergency interest-rate cut.

``While stimulative policies aren't going to have an immediate economic impact, they are bringing us close to the conclusion of recent turmoil,'' said Koshi Kumagai, a Tokyo-based fund manager at BNP Paribas Asset Management, which manages about $438 billion in assets worldwide.

The MSCI's Asian index climbed 4.5 percent to 145.73 at 7:25 p.m. in Tokyo, its steepest gain since Oct. 16, 1998, and adding to a two-day, 5.6 percent advance. Hong Kong's Hang Seng Index surged 6.7 percent, the region's biggest increase.

Japan's Nikkei 225 Stock Average added 4.1 percent to 13,629.16, the biggest advance since March 2002. South Korea's Kospi index climbed for a third day. Australia's S&P/ASX 200 Index rose the most in a decade. The Philippine Stock Exchange Index surged after Moody's Investors Service raised the debt rating outlook on the country to positive. All other Asian benchmarks gained.

Esprit Holdings Ltd. jumped in Hong Kong after business confidence unexpectedly rose in Germany, where the fashion retailer makes about half its sales. Wipro Ltd. paced gains by technology shares after Microsoft Corp., the world's largest software maker, reported net income that topped analyst estimates.

Stimulus Plan

U.S. stocks rose yesterday, helping the Standard & Poor's 500 Index to its biggest two-day rally since November, after lawmakers announced an agreement on an economic stimulus plan that will give tax rebates to 117 million families. In Europe, the Dow Jones Stoxx 600 Index surged 5.2 percent, its biggest gain since March 2003.

Bank of Communications advanced 12 percent to HK$9.89 in Hong Kong. Morgan Stanley raised its rating to ``overweight'' from ``equal weight.'' The bank said on Jan. 22 higher income from lending and fee-based services boosted its 2007 profit by more than 60 percent.

HSBC, Europe's No. 1 bank by market value, added 4.4 percent to HK$120.50 in Hong Kong. Macquarie Group Ltd., Australia's biggest securities firm, jumped 7.8 percent to A$69.02. Mizuho Financial Group Inc., the third-largest publicly traded bank by market value in Japan, surged 11 percent to 509,000 yen.

Rebound

Stocks are rebounding from losses earlier this week after the Fed held an emergency meeting and cut its benchmark interest rate by the most in 23 years and New York regulators met with U.S. banks to consider bailing out bond insurers.

Posco, Asia's third-biggest steelmaker, added 4.5 percent to 510,000 won in South Korea. Hyundai Heavy Industries Co., the world's biggest shipbuilder, rose 4.8 percent to 358,000 won.

South Korea's fourth-quarter economic growth of 1.5 percent accelerated from the previous quarter's 1.3 percent, the central bank said in Seoul today. That beat the median estimate of 1.3 percent in a Bloomberg News survey of economists.

The report comes after China said yesterday its economy expanded more than 11 percent for the fourth straight quarter, supporting global growth amid a U.S. slowdown.

Excited About Asia

``We're trying to remind people that the growth story in Asia is still there,'' said Kathryn Matthews, regional chief investment officer at Fidelity Investments, the world's largest mutual-fund company. ``All the fund managers here are excited about the prospects for Asia.''

BHP jumped 5.7 percent to A$36.80, extending a two-day, 12 percent surge. Rio Tinto Group, the world's third-biggest mining company, added 9.3 percent to A$118.50, its largest increase since Nov. 9.

The gains helped Australia's benchmark advance 5 percent, rounding out a three-day, 13 percent rally. That's the biggest three-day increase in its history, which dates back to 1992.

A gauge of six metals traded on the London Metal Exchange, including copper and nickel, jumped 2 percent yesterday, while crude oil prices surged 2.8 percent. Gold for immediate delivery yesterday rose 2.5 percent to $912.85 an ounce.

``Demand for commodities is going to stay very high, even if the U.S. slides into recession,'' said Gabriel Gondard, who helps manage $10 billion at Societe Generale SA's China fund venture. ``China's economic growth alone is sufficient to keep prices at high levels.''

Oil Companies

PetroChina, the nation's largest oil producer, surged 8.6 percent to HK$11.88 in Hong Kong.

Philippine Long Distance Telephone Co., the nation's largest company by market value, rose 4.9 percent to 2,800 pesos, its steepest gain since Aug. 23. Manila Electric Co., the country's biggest power distributor, surged 6.8 percent to 79 pesos.

Moody's cited the improving Philippine economy and a narrowing budget deficit for the outlook upgrade from stable. Moody's B1 rating on the nation is four levels below investment grade, the same as Cambodia, Pakistan and Uruguay, and one level below Indonesia.

Esprit jumped 14 percent to HK$97.50 in Hong Kong. The Munich-based Ifo research institute said yesterday its business- climate index increased to 103.4 this month. Economists forecast a drop to 102.3, according to estimates compiled by Bloomberg.

Wipro, India's third-largest software services provider, advanced 4.3 percent to 429 rupees. High Tech Computer Corp., the largest maker of handsets using Microsoft's Windows operating system, jumped 6.8 percent to NT$594. Lenovo Group Ltd., Asia's biggest personal-computer maker, surged 15 percent to HK$4.75.

Topped Estimates

Microsoft said yesterday that net income climbed 79 percent to 50 cents a share, topping the 46-cent average of estimates compiled by Bloomberg. Chief Executive Officer Steve Ballmer increased the annual sales forecast to as much as $60.5 billion, signaling Microsoft can withstand a slowdown in the U.S. economy.

Centro Properties Group, the Australian owner of 700 U.S. malls, surged 30 percent to 62.5 Australian cents, extending yesterday's 35 percent gain. New Chief Executive Officer Glenn Rufrano yesterday ruled out a fire sale of assets as he seeks to refinance A$3.9 billion ($3.4 billion) of the company's debt.

To contact the reporter on this story: Chen Shiyin in Singapore at schen37@bloomberg.net; Patrick Rial in Tokyo at prial@bloomberg.net.

Last Updated: January 25, 2008 05:28 EST