Dec. 20 (Bloomberg) -- Asian stocks rose. Bank of China Ltd. and Kookmin Bank paced the gains after China agreed to buy a stake in Morgan Stanley, easing concern that the fallout from writedowns by U.S. financial firms would spread.

``The fact that emerging countries are stepping up to provide funds indicates that we may be able to avoid a financial crisis,'' said Kiyoshi Ishigane, who helps oversee $61 billion in assets at Mitsubishi UFJ Asset Management Co. in Tokyo. ``That's good news for the market as a whole.''

The MSCI Asia Pacific Index gained 0.4 percent to 152.48 at 12:36 p.m. in Tokyo, snapping its longest losing streak in 18 months. Eight of the 10 industry groups on the benchmark gained.

Japan's Nikkei 225 Stock Average rose 0.8 percent to 15,156.03. Australia's S&P/ASX 200 Index dropped 0.4, falling for the seventh consecutive day. Toll Holdings Ltd. slid on concern it is bidding too much for an asset.

Stock exchanges in Singapore, Malaysia and Indonesia are closed for a public holiday.

Japanese banks including Mitsubishi UFJ Financial Group Inc. also rose after the Nikkei newspaper said the country's three biggest financial firms will refuse a request to contribute as much as $15 billion to a subprime-asset bailout fund.

Bank of China, the nation's third largest, gained 1.8 percent to HK$3.89, its biggest advance since Nov. 29. Hang Seng Bank Ltd., a unit of HSBC Holdings Plc, gained 2.5 percent to HK154.30. Kookmin Bank, South Korea's largest, climbed 2.2 percent to 68,900 won.

China's Investment

Morgan Stanley, the second-largest U.S. securities firm, wrote down its subprime-infected mortgage holdings by a greater- than-expected $9.4 billion and received a $5 billion cash infusion from China Investment Corp., the nation's sovereign wealth fund.

The ``significant capital raise'' and writedowns may suggest to investors that Morgan Stanley has put the worst of its subprime losses behind it, Jeffery Harte, an analyst at Sandler O'Neill & Partners LP, wrote in a note today.

Mitsubishi UFJ, the largest publicly traded Japanese lender, gained 3.3 percent to 1,065 yen. Sumitomo Mitsui Financial Group Inc., the second biggest, advanced 4.6 percent to 867,000 yen. Mizuho Financial, Japan's No. 3 lender, climbed 2.8 percent to 544,000 yen.

The three Japanese banks decided not to meet the request of a U.S. fund for as much as $5 billion each, the Nikkei newspaper reported, without saying where the information came from. The banks won't join the fund because they haven't had large losses from the subprime loan collapse and associated risks are unclear, the report said.

Tolls, Baltrans

``The amount they were asked to contribute was excessive and could have resulted in some major losses,'' said Seiji Iwama, who helps oversee $47 billion at Daiwa SB Investments Ltd. in Tokyo.

Mitsubishi UFJ spokesman Yusuke Fukui said the bank is still considering a request to contribute to a U.S. fund to bail out investments threatened by subprime loan defaults.

In Australia, Toll Holdings, the country's largest freight company, dropped 2.7 percent to A$11.68. The company offered about HK$2.49 billion ($319 million) for Baltrans Holdings Ltd., a Hong Kong-based freight forwarder. Baltrans jumped 41 percent to HK$7.60.

China Cosco Holdings Ltd., Asia's largest container line, gained 5 percent to HK$23.25 after it increased its profit forecast for this year by 50 percent. Mitsui OSK Lines Ltd., Japan's second-biggest shipping company, gained 1.8 percent to 1,441 yen.

SCMP Group Ltd., publisher of the South China Morning Post newspaper, jumped 8.4 percent to HK$2.71, the biggest gain in more than four years, after receiving a HK$2.37 billion buyout offer from parent Kerry Group.

To contact the reporter on this story: Chua Kong Ho at in Shanghai or kchua6@bloomberg.net; Patrick Rial at in Tokyo or prial@bloomberg.net

Last Updated: December 19, 2007 23:06 EST