Dec. 2 (Bloomberg) -- Asian stocks rose, sending a regional index to its biggest advance in almost three weeks, after a drop in oil prices eased concern that higher energy costs will leave consumers with less to spend.

Toyota Motor Corp. and LG Electronics Inc. led gains by exporters after reports showed consumer spending in the U.S., the world's largest economy, accelerated in October and factories there received more orders last month.

``Optimism about U.S. consumer spending is spreading,'' said Makoto Sakuma, who holds shares of Toyota and Canon Inc. among the $3.9 billion he helps manage at Asahi Life Asset Management Co. in Tokyo. ``Exporters are being bought as confidence in the market improves.''

The Morgan Stanley Capital International Asia-Pacific Index, which tracks the performance of more than 900 companies in the region, gained 1.7 percent to 97.92 at 12:28 p.m. in Tokyo. That's the biggest percentage advance since Nov. 12.

Australia's S&P/ASX 200 Index added 1.1 percent, set for its biggest gain in 14 months. Other benchmarks in the region also rose, except those in China, which were little changed.

Japan's Nikkei 225 Stock Average rose 1.7 percent to 10,967.83, while South Korea's Kospi index advanced 0.9 percent. Japan and South Korea import almost all of their oil.

The drop in oil along with the economic reports, which lifted the Standard & Poor's 500 Index to the highest since Aug. 7, 2001, overshadowed a slump in the dollar against Asian currencies including the yen and the won.

Oil Tumbles

Crude-oil futures for January delivery slid $3.64, or 7.4 percent, to $45.49 a barrel yesterday in New York.

Oil futures had their biggest decline in dollar terms since September 2001 after the U.S. government said heating oil inventories increased last week. Oil recently traded at $45.58. Prices have slumped 18 percent from a record $55.67 on Oct. 25.

U.S. consumer spending rose 0.7 percent in October following a 0.6 percent gain in September, the Commerce Department said. Meanwhile, the Institute for Supply Management's factory index rose to 57.8 last month, the first increase since July, from 56.8 in October. Economists in a Bloomberg News survey expected 57.

The U.S., the largest destination for Asia's goods, uses more than a quarter of the world's oil production. Higher oil prices raise energy costs for consumers and businesses, leaving them with less money to spend on other goods and services.

`Incentive to Buy'

Toyota, the world's largest automaker by value, added 1.1 percent to 3,850 yen. The company gets 80 percent of its operating profit from North America. Nissan Motor Co., Japan's second biggest, gained 2.3 percent to 1,103 yen.

Sales in the U.S., the world's biggest auto market, climbed 26 percent in November for Nissan, and 4.4 percent for Toyota, Autodata Corp. figures showed yesterday.

Canon, the world's largest seller of digital cameras, advanced 2.2 percent to 5,190 yen. The company gets 70 percent of its revenue from abroad.

Every 10 percent increase in the price of oil will cut current profit, or pretax profit from operations, of companies in Japan with more than 1 billion yen ($9.8 million) in capital by 1.7 percent, according to the Daiwa Institute of Research.

``Lower oil prices and good economic numbers from the U.S. provide an incentive to buy exporters,'' said Kenji Kobata, a manager at Ace Securities in Tokyo.

LG Electronics, South Korea's second-biggest consumer electronics maker, rose 2.6 percent to 63,700 won. Hyundai Motor Co., the nation's largest carmaker, climbed 1.8 percent to 51,900 won. U.S sales account for about a quarter of its total revenue.

Taiwan, Australia

Taiwan Semiconductor Manufacturing Co., the world's largest supplier of made-to-order chips, added 2.4 percent to NT$47.50. It gets three quarters of its revenue from the U.S.

Venture Corp., Singapore's largest electronics manufacturer for customers such as Hewlett-Packard Co., jumped 2.5 percent to S$16.30.

Australia's S&P/ASX 200 climbed 1.1 percent, the biggest advance since Oct. 2, 2003. National Australia Bank Ltd., the country's largest lender, rose 1 percent to A$28.05. Woolworths Ltd., the nation's biggest grocer, added 1.4 percent to A$14.81.

Oil producers and explorers fell on concern lower prices will cut sales. An index of 23 energy stocks was the only group to drop among the 10 industries in the MSCI regional index.

Woodside Petroleum Ltd., Australia's second-largest oil and gas producer, shed 0.9 percent to A$20. CNOOC Ltd., China's biggest offshore oil company, fell 1.1 percent to HK$4.375.

SK Corp., South Korea's largest oil refiner with stakes in offshore-oil exploration projects, fell 2.7 percent to 67,400 won. AOC Holdings Inc., an oil producer formed by a merger of Arabian Oil Co. and Fuji Oil Co., slumped 4.5 percent to 1,188 yen.

To contact the reporter on this story: Michael Tsang in Tokyo at mtsang1@bloomberg.net.

Last Updated: December 1, 2004 22:40 EST