April 1 (Bloomberg) -- Asian stocks rose for a second week in three, approaching a 16-year high. BHP Billiton and Jiangxi Copper Co. jumped after metals prices surged to records.

``These are the strongest global conditions for metals since the sixties, since bell-bottoms were in,'' said Hans Kunnen, who helps manage about $70 billion at Sydney-based Colonial First State, Australia's biggest fund manager. ``There's room for the miners' earnings to grow.''

Mitsubishi UFJ Financial Group Inc. led an advance in financial shares after Goldman, Sachs & Co. increased its profit forecast for Japan's eight biggest banks. Banks also got a boost from expectations that acquisitions in South Korea will raise earnings at lenders such as Shinhan Financial Group Ltd.

The Morgan Stanley Capital International Asia-Pacific Index, which tracks shares in 14 markets in the region in dollars, climbed 2.7 percent to 131.40 this week, pushing it to within half a percent of its highest level since Jan. 11, 1990. Raw- materials suppliers, energy producers and lenders accounted for almost half the index's weekly advance.

In Japan, which accounts for about 60 percent of MSCI's value in Asia, the Nikkei 225 Stock Average climbed 3 percent to exceed 17,000 for the first time in more than five years.

Stock markets across the region posted gains for the week, with the exception of the Philippines. Taiwan's Taiex index had the biggest percentage advance, jumping 3.7 percent.

`Alive and Well'

A measure of materials suppliers advanced 3.8 percent in the week. BHP Billiton, the world's biggest mining company, made the biggest contribution to the gain, jumping 8 percent. The surge was the biggest since the week ended Oct. 18, 2002, helping it become the first Australian company to surpass A$100 billion ($72 billion) in market value.

Rio Tinto Group, the world's third-largest mining company, gained 4.8 percent, while Jiangxi Copper, China's second-biggest copper smelter by output, surged 20 percent in Hong Kong.

During the week, copper, zinc and platinum prices rose to records, while gold and silver reached their highest in more than two decades. Meanwhile, crude-oil futures rose 4 percent in the week and climbed to the highest since Jan. 31.

Among energy-related shares, Woodside Petroleum Ltd., Australia's No. 2 oil and gas company, jumped 5 percent, while SK Corp., South Korea's largest oil refiner, added 6.5 percent.

``Commodities stocks are clearly leading the rally on the back of global growth and China,'' said Rob Patterson, who manages $2.4 billion in Australian equities at Argo Investments in Adelaide, Australia. ``The resource boom is alive and well.''

Security Blanket

Banks, the biggest industry group in the MSCI, made the largest contribution to the regional index's weekly gain.

Mitsubishi UFJ, the world's biggest lender by assets, climbed 6.5 percent. Mizuho Financial Group Inc., Japan's No. 2 bank, added 3.4 percent, while Sumitomo Mitsui Financial Group Inc., the smallest of the three, gained 4 percent.

Goldman Sachs on March 30 raised its profit estimate for Mitsubishi UFJ and its seven biggest rivals by 31 percent to 3.4 trillion yen ($28 billion) for the business year ended March 31.

The brokerage also boosted its profit forecast for the year starting April 1 by 43 percent because lending margins, or the difference between the rates banks offer depositors and charge borrowers, will expand as interest rates rise, said David Atkinson, an analyst at Goldman's Tokyo unit.

``Banks rose as the Goldman report encouraged investors who had been concerned about the impact of rate increases'' in Japan on earnings, said Masaki Iso, who oversees $6.7 billion as head of Japanese equities at Yasuda Asset Management Co. in Tokyo.

Afraid to Lose

Lenders in South Korea also gained on speculation mergers and acquisitions in the industry will result in higher profits.

Creditors of LG Card Co., the nation's second-largest card company, said this week prospective bidders in the company have until April 19 to submit proposals.

On March 23, Kookmin Bank, South Korea's biggest lender, agreed to pay as much as 7 trillion won ($7.2 billion) for control of Korea Exchange Bank, in what would be the nation's largest takeover.

Shinhan Financial Group Ltd., South Korea's second-largest lender by assets, added 5.3 percent in the week. Woori Finance Holdings Co., the third biggest, rose 2.7 percent. Both shares climbed to their highest in at least 12 months.

``This is a global trend'' in the financial industry, said Choi Chang Hoon, who helps manage about $1.1 billion in South Korean equities at Woori Asset Management Co. in Seoul. ``Banks are very eager to get bigger because no one wants to lose out and become a target themselves.''

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

Last Updated: March 31, 2006 18:21 EST