June 12 (Bloomberg) -- Asian stocks rose for a third day, led by consumer and financial shares, after increases in Chinese and U.S. retail sales and a surge in metals prices added to evidence the global recession is easing.

Li & Fung Ltd., the biggest supplier of clothes and toys to Wal-Mart Stores Inc. and Target Corp., soared 3.9 percent. Mt. Gibson Iron Ltd. climbed 7.4 percent, leading Australian iron- ore exporters higher in Sydney trading. Korea Zinc Co., the No. 2 smelter of the metal globally, added 3.2 percent. Nomura Holdings Inc., Japan’s No. 1 brokerage, jumped 4.8 percent after Merrill Lynch & Co. raised the stock to “buy” on expectations it will return to profit.

“There is a general sense that the worst has passed,” said Matt Riordan, who helps manage about $3.2 billion at Paradice Investment Management in Sydney. “As things recover in the U.S., people will start buying imported products again, and that also flows through into resources.”

The MSCI Asia Pacific Index gained 0.7 percent to 105.77 as of 1:59 p.m. in Tokyo, set for the highest since Oct. 2 and bringing its three-day climb to 3.6 percent. The gauge is set for a 2.4 percent advance on the week, its fourth-straight gain, after Australian consumer confidence jumped by the most in 22 years and fixed-asset investment in China accelerated.

Japan’s Nikkei 225 Stock Average added 1.2 percent, heading for the highest close since Oct. 7. Stocks also climbed in South Korea, Hong Kong and New Zealand. Australia’s S&P/ASX 200 Index advanced 0.3 percent, set to finish at a seven-month high.

Retail Sales

Mitsubishi Heavy Industries Ltd. soared 6.1 percent on its talks to build a power plant Australia. OZ Minerals Ltd. jumped 14 percent after shareholders approved a sale of assets.

Futures on the Standard & Poor’s 500 Index added 0.1 percent. The gauge climbed 0.6 percent yesterday as U.S. retail sales in May rose for the first time in three months, and initial jobless claims declined last week to the lowest level since January, separate government reports showed yesterday.

China’s retail sales jumped 15.2 percent in May, the statistics bureau said today, the most in four months.

Li & Fung soared 3.9 percent to HK$22.70 in Hong Kong. LG Electronics Inc., the world’s third-biggest handset maker, climbed 2.1 percent to 122,500 won in Seoul.

Mt. Gibson, Australia’s fourth-biggest iron-ore producer by market value, surged 7.4 percent to A$1.16 after China’s statistics bureau said industrial-output growth accelerated to 8.9 percent in May, higher than economist estimates. Australian rival Murchison Metals Ltd. rallied 6.5 percent to A$2.13.

Lending Surge

A gauge of six metals leapt 4.2 percent in London yesterday, the steepest climb since June 1, while crude oil for July delivery added 1.9 percent to $72.68 a barrel in New York, the highest settlement since Oct. 20. The Baltic Dry Index, a measure of shipping costs for commodities, gained for the first time in six days with a 0.9 percent advance.

Korea Zinc added 3.2 percent to 163,000 won. Mincor Resources Ltd. climbed 4.2 percent to A$1.74 after nickel rallied 5.9 percent in London yesterday.

HSBC Holdings Plc Europe’s biggest bank, rose 2.9 percent to HK$69.45 after China’s central bank said new lending doubled. New loans increased in May to 664.5 billion yuan ($97 billion) from 318.5 billion yuan a year earlier, adding to a credit boom that is supporting the government’s 4 trillion yuan stimulus plan.

Chinese shares gave up early gains on speculation this year’s rally has outpaced prospects for growth. The Shanghai Composite Index, up 52 percent on the year, dipped 0.6 percent.

‘Tread Water’

Air China Ltd., the nation’s largest international carrier, lost 2.6 percent to 6.44 yuan in Shanghai. China Southern Airlines Co., the biggest carrier by fleet size, dropped 2.1 percent 5.15 yuan.

China’s stocks will “tread water” in coming months as the Shanghai Composite trades in the 2,800-3,000 range, CLSA Ltd.’s Christopher Wood said in a research note dated yesterday.

“Local investors expect considerable resistance and a correction sooner or later,” wrote Wood, the top-ranked Asian strategist in the 2008 Institutional Investor survey.

Nomura gained 4.8 percent to 914 yen after Merrill Lynch raised it to “buy,” saying the company should return to profit this year as operating costs decline. Bank of Yokohama Ltd., a regional bank, rallied 6.3 percent to 522 yen in Tokyo.

“The rebound in the stock market is helping increase fee revenues at brokerages and is easing investor concern valuation losses will balloon at financial companies,” said Masaru Hamasaki, a Tokyo-based senior strategist at Toyota Asset Management Co., which oversees $15 billion.

Trading Fees

Retailers in New Zealand rallied after retail sales rose for the second time in three months in April, adding to signs that record-low interest rates and income-tax cuts may help the economy emerge from a recession this year.

Pumpkin Patch Ltd., a children’s clothing retailer, gained 2.3 percent to NZ$1.35. Michael Hill International Ltd., New Zealand’s largest specialty jewelry retailer, rallied 3 percent to 69 cents.

OZ Minerals, an Australian mining company, soared 14 percent to A$1.015 in Sydney, the Asian index’s best performance. Shareholders approved a sale of assets to China Minmetals Group. Virgin Blue Holdings Ltd., Australia’s second-largest airline, rose 7.9 percent to 34 Australian cents after JPMorgan Chase & Co. affirmed its “overweight” rating, citing improving consumer sentiment.

Mitsubishi Heavy soared 6.1 percent to 415 yen. Japan’s largest heavy-machinery maker said it’s in talks with the Queensland government to build a cleaner-burning, next- generation coal-fired power plant in the Australian state.

Latex Gloves

Top Glove Corp., the world’s largest rubber glove maker, added 3.3 percent to 6.25 ringgit in Kuala Lumpur on optimism the swine flu pandemic will boost demand beyond initial estimates. Top Glove, whose best-selling product is the latex examination glove, has said the virus will bolster global demand by 5 percent.

Yahoo! Japan Corp., the nation’s most-visited Internet portal, rose 9.4 percent to 30,850 yen after KBC Securities Japan raised its investment rating on the stock to “buy” from “hold,” saying cost reductions were helping it stay profitable.

Nintendo Co., the world’s biggest maker of handheld game machines, slumped 1.4 percent to 25,480 yen in Osaka. Sales of the company’s Wii machine tumbled 57 percent in May from a year earlier, NPD Group Inc. said yesterday.

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

Last Updated: June 12, 2009 01:06 EDT