Jan. 7 (Bloomberg) -- Asian shares rose, lifting the benchmark index by the most in three weeks, after U.S. President-elect Barack Obama indicated stimulus spending will continue for years, boosting confidence consumption in the world’s biggest economy will rebound.

Fuji Heavy Industries Ltd., the maker of Subaru cars, soared 21 percent following Obama’s comments and as a weaker yen boosted the profit outlook for overseas sales. Rio Tinto Group, the world’s No. 3 mining company, surged 8.1 percent after copper prices jumped the most in a month. The region’s markets pared gains after India’s Satyam Computer Services Ltd. said it falsified its books, prompting a record 78 percent share drop.

The MSCI Asia Pacific Index rose 1.5 percent to 92.15 as of 9:31 p.m. in Tokyo, retreating from a 2.5 percent gain. The cost of protecting Asian and Australian bonds from default fell to a two-month low as stimulus measures lifted investor confidence.

“There are high expectations for all those stimulus measures, on both the fiscal and monetary fronts,” said Lim Chang Gue, a fund manager at Samsung Investment Trust Management Co. in Seoul, which oversees about $50 billion in assets. “Risk appetite is slowly growing, and sectors that have been deemed as riskier are leading the charge.”

MSCI’s Asian gauge has rallied 23 percent since falling to a five-year low in November during the market’s worst year in its two-decade history. Japan’s Nikkei 225 Stock Average added 1.7 percent to 9,239.24 today, rising for a seventh-straight day, the longest streak since April 2006.

About the same number of markets climbed as fell in the region. India’s Sensex Index slumped 7.3 percent as Satyam’s admission raised concern about the validity of profits at other companies.

Tax Cuts

China Construction Bank Corp., the nation’s second-largest lender, led financial shares lower in Hong Kong as Bank of America Corp. sold $2.8 billion of the company’s stock.

U.S. stocks climbed yesterday, with the Standard & Poor’s 500 Index gaining 0.8 percent. S&P futures lost 0.8 percent in trading today.

Obama, who takes office on Jan. 20, said he expects to inherit a $1 trillion budget deficit and that similar shortfalls are in store “for years to come.” He’s pushing for a stimulus plan of about $775 billion over two years, including tax cuts worth $500 for individuals, according to a House Democratic aide. His administration’s economic stimulus plan includes the largest infrastructure investment since the 1950s.

Default Risk

Fuji Heavy surged 21 percent to 297 yen. Honda Motor Co., Japan’s second-biggest carmaker, jumped 11 percent to 2,210 yen. Sharp Corp., Japan’s largest maker of liquid-crystal displays, rallied 13 percent to 897 yen. Komatsu Ltd., the world’s No. 2 maker of earthmovers, rose a fourth day, adding 4.4 percent to 1,306 yen.

Japan’s shares also advanced after the dollar rose for a sixth day against the yen, the longest run of gains in two years. The U.S. currency strengthened to as much as 94.14 yen today, near a five-week high, boosting the value of overseas sales for Japanese exporters.

The Markit iTraxx Australia index of credit-default swaps fell 25 basis points to 285 in Sydney, the first time the Series 10 benchmark dipped below 300 since mid-November, Citigroup Inc. prices show. The Markit iTraxx Japan index was down 6 basis points at 275 in Tokyo, according to Barclays Capital.

Forecast Cuts

BNP Paribas’s chief Asia economist Richard Iley slashed his growth forecasts for the region today, predicting contractions in Hong Kong, Taiwan, South Korea, Singapore and Thailand in 2009. Expansion is likely to resume in 2010 due to massive policy initiatives globally, he wrote in a report.

“One of the few investment themes we have in 2009 is public spending by governments globally,” said Yoshinori Nagano, a senior strategist at Tokyo-based Daiwa Asset Management Co., which manages $96 billion. “Resource companies, steelmakers and machinery manufacturers are industries this favors.”

Rio jumped 8.1 percent to A$46.93. Mitsui & Co., Japan’s second-largest trading company, soared 8.5 percent to 1,052 yen. China Cosco Holdings Co., the world’s largest operator of commodity ships, rose 4 percent to HK$6.50 in Hong Kong.

Copper futures for March delivery jumped 8.5 percent in New York, the most since Dec. 8, and surged by the daily limit in Shanghai today amid speculation Obama’s spending package will lift demand for materials. A measure of six metals traded in London jumped 4.6 percent.

‘Oversold’ Commodities

“Right now, as of today, I would rather buy a basket of oversold industrial commodities” than gold, said Marc Faber, publisher of the Gloom, Boom & Doom Report. Faber, who successfully predicted the 1987 stock crash as well as the rally in the dollar in 2008, spoke in an interview with Bloomberg Television.

Hitachi Metals Ltd., a maker of specialty steel, soared by its daily limit, or 16 percent, to 575 yen. Posco, Asia’s third- largest steelmaker, advanced 5.9 percent to 430,000 won in Seoul. BlueScope Steel Ltd., Australia’s No. 1 maker of the alloy, rose 6.1 percent to A$4.03.

Iron ore, a raw material for steel, has risen 24 percent since Oct. 31, when it fell to the lowest in three years, based on data compiled by industry publication Metal Bulletin. That indicates steel is set for a “tentative recovery,” according to Michael Rawlinson, head of mining, resources and energy at London-based brokerage Liberum Capital Ltd.

China Construction Bank

Satyam Computer, India’s fourth-largest software-services provider, plunged 138.7 rupees to 32. Chairman Ramalinga Raju tendered his resignation as he said the company overstated profits over several years.

Reliance Industries Ltd. India’s largest company by market value, fell 12 percent, while ICICI Bank Ltd., the country’s second-largest bank, lost 11 percent.

“It’s a shocker,” said Jayesh Shroff, who helps manage about $4.7 billion at SBI Asset Management Co. in Mumbai. “People will no longer be willing to take income statements at face value. This has also raised questions about cash holdings of other companies.”

China Construction Bank lost 8.8 percent to HK$4.06 in Hong Kong and fell 2.5 percent in Shanghai. Bank of America sold 5.62 billion shares in the lender at HK$3.92 apiece, a 12 percent discount to the closing price yesterday, to raise money for its purchase of Merrill Lynch & Co.

Malaysia’s Parkson Holdings Bhd., operator of 46 department stores in China, slumped 16 percent to 3.58 ringgit after sales growth in the world’s most populous nation slowed by a third to between 7 percent and 8 percent.

CapitaCommercial Trust, the office landlord partly owned by Singapore’s largest developer, rallied 7 percent to S$1.00 after saying it will refinance as much as S$580 million ($393 million) of mortgage-backed securities through bank loans.

Panasonic Corp., the world’s largest maker of consumer electronics, jumped 8.7 percent to 1,294 yen after President Fumio Ohtsubo said the company will “come close” to meeting its television sales target this year.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net.

Last Updated: January 7, 2009 07:54 EST