Nov. 3 (Bloomberg) -- Asian stocks rose, extending last week's rally, as South Korea pledged to pump $10.8 billion into its economy and India cut interest rates to ease the fallout from the global credit crisis.

Mumbai-based ICICI Bank Ltd. jumped 7.6 percent and Shinhan Financial Group Co. climbed 5.9 percent in Seoul, leading financial shares higher. National Australia Bank Ltd. added 4.6 percent as money-market rates fell on speculation policy makers will lower borrowing costs tomorrow. China Overseas Land & Investment Ltd. surged 5.5 percent, leading gains among property developers in China, after the state news agency reported the central bank removed loan controls.

``Risk appetite is picking up and it is driven by the improvement in credit markets and very attractive valuations in equities,'' said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors, which manages about $108 billion. ``The coordinated steps taken by governments are beginning to bear results.''

The MSCI Asia Pacific excluding Japan Index rose 12.37, or 5.1 percent, to 256.06 as of 6:21 p.m. in Hong Kong. Japanese markets were shut for a holiday. All of the Asian gauge's 10 industry groups advanced, with financial companies contributing the most to the gain. Seven stocks rose for each that fell.

The measure declined 54 percent for the first 10 months of the year, valuing its stocks at an average of 8.9 times trailing earnings in October, the lowest since at least January 1995.

All markets open in Asia advanced today, except in China. Australia's S&P/ASX 200 Index climbed 5.1 percent, South Korea's Kospi Index added 1.4 percent, and Hong Kong's Hang Seng Index gained 2.7 percent. Indonesia's Jakarta Composite Index jumped 7.6 percent, the biggest gain since Jan. 23, ahead of figures today showing that inflation slowed in October.

Interest Rates

Futures on the Standard & Poor's 500 Index added 0.2 percent. The benchmark measure gained 1.5 percent on Oct. 31 as JPMorgan Chase & Co. said it will modify terms on $110 billion of mortgages and delay foreclosures.

The MSCI index of Asian stocks that includes Japan rallied 6.9 percent last week, the most in more than a year, as central bank steps to unlock credit markets spurred demand for the region's shares. The gauge still lost 20 percent in October, part of a sell-off that erased more than $9.5 trillion from the value of stocks worldwide, as credit-related losses and writedowns by financial companies approached $700 billion.

The Reserve Bank of India on Nov. 1 pushed its repurchase rate down for the second time in two weeks, capping a week of interest-rate reductions in Japan, China, South Korea and Taiwan. Cuts may continue this week, with the European Central Bank and Bank of England both setting policy on Nov. 6. Australia's central bank may also cut rates tomorrow.

Receding Concerns?

ICICI Bank, the Indian lender with the biggest losses due to the credit crisis, climbed 7.6 percent to 429.1 rupees. The country's central bank also cut the amount lenders must set aside as reserves to free up more cash for lending. The Reserve Bank is trying to bolster an economy that grew 7.9 percent in the second quarter, the slowest pace since 2004.

Shinhan Financial gained 5.9 percent to 33,150 won, the biggest boost to the Kospi Index. Woori Finance Holdings Co. gained 6.4 percent to 7,160 won, while KB Financial Group Co. advanced 3.3 percent to 33,050 won.

``Credit jitters have moved to the back of investors' minds thanks to a series of government measures,'' said Christian Jin, head of global investment in HI Asset Management Co. in Seoul, which manages the equivalent of $7.8 billion in assets.

Further Deterioration

South Korea said today it will invest an extra 14 trillion won ($10.8 billion) into its economy next year to prevent the nation's first recession in a decade. The government will spend 3.4 trillion won more to help smaller companies and farmers, and 1.3 trillion won to boost the labor market and aid low-income earners in 2009, Finance Minister Kang Man Soo told reporters today in Gwacheon.

The package will add 1 percentage point to the economic growth rate, which is at risk of falling below 3 percent next year if global conditions deteriorate further, he said. Exports, the main engine of growth, rose by the least in 13 months in October, an overseas trade report today showed.

National Australia Bank added 4.6 percent to A$25.10, Westpac Banking Corp. advanced 5.9 percent to A$21.47.

The rate Australia's banks charge each other for three- month loans fell 19 basis points, or 0.19 percentage point, to 5.62 percent in Sydney. The Reserve Bank of Australia pumped A$1.48 billion ($992 million) into money markets today.

Earnings Estimates

Money-market rates also fell in Hong Kong and Singapore. The three-month interbank offered rate in Hong Kong fell to a six-week low, while that in Singapore dropped to the lowest since Sept. 16, according to the bank associations in both cities.

China Overseas Land, a property developer controlled by the nation's construction ministry, surged 5.5 percent to HK$8.95. Shimao Property Holdings Ltd., a mainland Chinese developer, advanced 5.9 percent to HK$4.33.

China's central bank removed temporary controls over loans to maintain stable, ``relatively fast'' economic growth and counter the global financial crisis, the official Xinhua News Agency reported Nov. 1.

Hyundai Steel Co., South Korea's second-largest steelmaker, climbed 3.3 percent 37,800 won, while Acer Inc., the world's third-largest computer supplier, climbed 7 percent to NT$45.95 in Taipei. The companies both reported third-quarter profit that beat the estimates of analysts surveyed by Bloomberg News.

To contact the reporter for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net; Ian C. Sayson in Singapore at isayson@bloomberg.net.

Last Updated: November 3, 2008 05:22 EST