Oct. 25 (Bloomberg) -- Asian stocks rose, led by Posco and Hyundai Heavy Industries Co., after South Korea reported the fastest economic growth in almost two years and billionaire Warren Buffett said he liked the country's equities.

``The Korean economy is doing pretty well, helped in part by stronger consumer spending,'' said Shane Oliver, who helps manage $83 billion at AMP Capital Investors in Sydney.

Cheung Kong (Holdings) Ltd. paced gains by Hong Kong's real-estate developers on expectations borrowing costs will fall and spur home demand. Canon Inc. led Japanese exporters lower after the yen strengthened against the dollar.

Mizuho Financial Group Inc. slumped to a two-year low after the Asahi newspaper said the bank will book a charge from loan losses. China's CSI 300 Index fell 4.6 percent, the region's worst performer, on speculation the country's central bank will raise interest rates to rein in surging economic growth.

The Morgan Stanley Capital International Asia-Pacific Index gained 0.1 percent to 164.67 at 6:27 p.m. in Tokyo. Japan's Nikkei 225 Stock Average dropped 0.5 percent to 16,284.17, while the broader Topix index fell 1 percent. South Korea's Kospi index jumped 2.2 percent, the third-best performance in the region after Indonesia and Thailand. Hong Kong's Hang Seng Index gained 1.8 percent to a new high of 29,854.49.

Benchmarks elsewhere in Asia advanced except in Australia and New Zealand.

Posco, South Korea

Posco, South Korea's largest steelmaker, rose 4.2 percent to 651,000 won, the biggest gain since Oct. 2. Hyundai Heavy, the world's No. 1 shipbuilder, advanced 5.5 percent to 474,000 won, the most in a month. Hyundai Department Co., the nation's second-largest department store chain, jumped 7 percent to 115,000 won, after a report by the Bank of Korea showed consumer spending more than doubled last quarter.

South Korea's economy grew 1.4 percent in the third quarter from the previous three months, the nation's central bank said today. That was in line with the 1.5 percent median estimate of economists in a Bloomberg survey. The economy expanded 5.2 percent from a year earlier, the fastest pace since the first quarter of 2006. The Kospi index has advanced 38 percent this year.

``I don't think there's a bubble'' in South Korean equities, Buffett said today at a press conference in Daegu, South Korea, where he's visiting a subsidiary of his Berkshire Hathaway company and meeting with business leaders.

Hong Kong Developers

Hong Kong-based Cheung Kong, controlled by billionaire Li Ka-Shing, climbed 7.8 percent to HK$138.30. Sun Hung Kai Properties Ltd., the city's largest real-estate developer, gained 8.4 percent to HK$147.70.

Interest-rate futures show traders forecast an 86 percent chance the U.S. Federal Reserve will reduce borrowing costs by a quarter-percentage point to 4.5 percent when it meets Oct. 31. Hong Kong's interest rates typically move in step with those in the U.S. because the city's currency is linked to the dollar. Lower interest rates make the cost of mortgages and other credit cheaper, helping to sustain demand for real estate.

``A rate cut is certainly good and particularly benefits developers,'' said Mona Chung, who helps manage $2.5 billion at Daiwa Asset Management Ltd. in Hong Kong.

In Japan, Canon, the world's largest seller of digital cameras, fell 2.6 percent to 5,580. Toyota Motor Corp., the nation's No. 1 automaker, declined 1.5 percent to 5,950 yen. Komatsu Ltd., the world's second-largest maker of construction machinery, lost 2.7 percent to 3,670.

Mizuho Drops

The yen traded at 113.97 against the dollar at the 3 p.m. close of trading in Tokyo, from 114.27 as Japanese markets shut yesterday. A stronger yen decreases the value of Japanese exporters' dollar-denominated sales when converted into local currency.

Mizuho, Japan's second-largest publicly traded lender, fell 3.9 percent to 588,000 yen, the lowest close since Aug. 2005. Mitsubishi UFJ Financial Group Inc., the largest, dropped 1.9 percent to 1,018 yen. Sumitomo Mitsui Financial Group Inc., the third biggest, lost 1.3 percent to 829,000.

Mizuho will book a 50 billion yen ($438 million) charge for the first half to reflect a loss related to U.S. subprime loans, the Asahi newspaper said. The lender will not miss its first-half net income forecast because the charge will be offset by gains in other divisions, according to the report.

China Stocks

Baoshan Iron & Steel Co., China's biggest steelmaker, fell 5.9 percent to 17.54 yuan. China Yangtze Power Co., the operator of the world's biggest hydropower project, declined 7.5 percent to 19.58 yuan.

Only 20 of the 300 stocks on the benchmark CSI 300 Index gained today, amid concern the central bank will raise interest rates to cool an economy that has expanded more than 11 percent for a third-straight quarter. The measure fell the most since Sept. 11.

``The central bank may raise interest rates immediately,'' said Wang Qing, chief China economist at Morgan Stanley in Hong Kong. ``We expect the yuan to appreciate more quickly over the next three months as part of measures to cool the economy.''

Elsewhere, Cosco Corp. Singapore Ltd., a unit of China's largest shipping company, surged 9.4 percent to S$7.60, after announcing it won $1.3 billion in orders to build 29 bulk carriers, used for hauling raw materials.

Baoshan Iron & Steel Co. (600019 CH)
Canon Inc. (7751 JT)
Cheung Kong (Holdings) Ltd. (1 HK)
China Yangtze Power Co. (600900 CH)
Cosco Corp. Singapore Ltd. (COS SP)
Hyundai Department Co. (069960 KS)
Hyundai Heavy Industries Co. (009540 KS)
Komatsu Ltd. (6301 JT)
Mitsubishi UFJ Financial Group Inc. (8306 JT)
Mizuho Financial Group Inc. (8411 JT)
Posco (005490 KS)
Sumitomo Mitsui Financial Group Inc. (8316 JT)
Sun Hung Kai Properties Ltd. (16 HK)
Toyota Motor Corp. (7203 JT)

To contact the reporter on this story: Chua Kong Ho in Singapore at kchua6@bloomberg.net; Chen Shiyin in Singapore at schen37@bloomberg.net

Last Updated: October 25, 2007 06:02 EDT