Oct. 10 (Bloomberg) -- Asian stocks posted the biggest weekly advance in a month as U.S. economic data and a surprise interest-rate increase in Australia renewed optimism that the global economic recovery is on track.

Mazda Motor Corp., part owned by Ford Motor Co., surged 16 percent after it narrowed its full-year loss forecast and U.S. services industries grew after 11 months of contraction. Alumina Ltd. rose 7.5 percent after partner Alcoa Inc. reported better- than-estimated profit. Sumitomo Mitsui Financial Group Inc. climbed 17 percent after the government said lenders won’t have to boost provisions for bad loans to struggling small companies.

The MSCI Asia Pacific Index advanced 3.8 percent to 118.77 this week, its biggest gain since the period to Sept. 11. The gauge has climbed 68 percent from a five-year low on March 9 as better-than-estimated economic and earnings reports boosted speculation the global economy is recovering from the worst slowdown since World War II.

“We’re all hoping the global recession is winding to a close,” said Rob Patterson, who helps manage $3.4 billion at Argo Investments Ltd. in Adelaide. “Certainly, the economic indicators are getting less worse, but I don’t imagine the U.S. will be raising rates any time soon.”

Australia’s S&P/ASX 200 Index gained 3.3 percent as signs of growth prompted the country to become the first among the Group of 20 nations to lift borrowing costs. Hang Seng Index climbed 5.5 percent as property stocks rallied after Goldman Sachs Group Inc. recommended buying Sino Land Co.

Record Gold Prices

China’s Shanghai Composite Index climbed 4.8 percent when it resumed trading yesterday following an eight-day holiday. Zijin Mining Group Co., China’s largest gold producer, surged 10 percent after the precious metal rose to a record.

Asian exporters gained after the U.S. Institute of Supply Management said its index of non-manufacturing businesses exceeded the dividing line between expansion and contraction in September for the first time in a year. Reports on Oct. 8 showed U.S. jobless claims fell more than economists estimated and retail sales rose for the first time in 13 months.

Li & Fung Ltd., the biggest supplier of clothes and toys to Wal-Mart Stores Inc. and Target Corp., gained 9.6 percent to HK$32.65. Nissan Motor Co., which got 34 percent of sales from North America last year, surged 14 percent to 673 yen.

“The weight of conviction is edging toward the recovery view,” said Michael Auyeung, who manages about $500 million as chief investment officer at Pacific Mutual Fund Bhd. in Petaling Jaya, outside Kuala Lumpur. “The stop-start nature of some of the economic data flows should be expected, but the trends are discernibly more to the upside.”

Earnings Reports

Mazda, 13.8 percent owned by Ford, surged 16 percent to 227 yen on plans to bolster its balance sheet with a share sale and after narrowing its full-year loss forecast. The company said yesterday its sales in China rose 65 percent in September to a monthly record.

Alumina, Alcoa’s partner in the world’s biggest producer of the material used to make aluminum, climbed 7.5 percent to A$1.875. Alcoa, the largest U.S. aluminum producer, reported third-quarter profit, while analysts had estimated a loss. The company was the first in the Dow Jones Industrial Average to release results.

In Tokyo, Sumitomo Mitsui, Japan’s second-biggest bank, surged 17 percent to 3,470 yen. Mitsubishi UFJ Financial Group Inc., Japan’s largest listed bank, rose 12 percent to 500 yen.

Financial Services Minister Shizuka Kamei said on Oct. 6 Japanese lenders won’t have to classify loans covered by a proposed moratorium of debt payments by struggling small companies as non-performing. The proposed bill will be submitted to parliament next month.

Higher Interest Rates

In Australia, shares of the four-biggest lenders advanced after the banks raised their mortgage rates on Oct. 8. That follows a surprise Reserve Bank of Australia decision to raise its benchmark interest rates from a 49-year low on Oct. 6.

Commonwealth Bank of Australia climbed 6.3 percent to A$53.16. National Australia Bank Ltd. rose 5.9 percent to A$31.60. Westpac Banking Corp. gained 4.1 percent to A$26.12. Australia & New Zealand Banking Group Ltd. added 4.3 percent to A$24.62.

The country’s statistics bureau reported on Oct. 8 that the number of people employed rose 40,600 last month from August. The median estimate of economists surveyed by Bloomberg was for a decline of 10,000.

Sino Land advanced 12 percent to HK$15 after Goldman Sachs upgraded the stock to “buy” from “neutral,” citing an influx of mainland Chinese buyers into the city’s property market, a research note said Oct. 8.

Hong Kong Developers

In addition to Sino Land, Sun Hung Kai Properties Ltd., Kerry Properties Ltd. and Hang Lung Properties Ltd. are also among Goldman Sachs’ top buy recommendations, the report said.

Sun Hung Kai, Hong Kong’s No. 1 property developer by market value, gained 6.4 percent to HK$117.40. Kerry Properties, a Hong Kong-based builder controlled by the family of Malaysian tycoon Robert Kuok, rose 6 percent to HK$41.75. Hang Lung, a Hong Kong-based developer which also invests in mainland China, added 6 percent to HK$28.15.

Zijin Mining, China’s largest gold producer, surged 10 percent to 9.34 yuan, while Shandong Gold Mining Co. climbed 10 percent to 64.90 yuan after gold futures in New York reached a record $1,062.70 an ounce on Oct.8.

China’s economic growth in the third quarter may have surpassed 8 percent, Liu Mingkang, chairman of the China Banking Regulatory Commission, said in a speech in Hong Kong. The economy expanded 7.9 percent in the second quarter.

To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net. Shani Raja in Sydney at sraja4@bloomberg.net.

Last Updated: October 9, 2009 18:01 EDT