By Patrick Rial and Chua Kong Ho Nov. 10 (Bloomberg) -- Asian stocks rallied for the first time in three days and U.S. index futures jumped after China announced a $586 billion package to revive growth in the world's fourth-largest economy. Hitachi Construction Machinery Co., which generates a sixth of its sales in China, soared 17 percent in Tokyo after the Chinese government announced infrastructure spending, tax deductions and farming subsidies. BHP Billiton Ltd., the world's largest mining company, rose 7 percent as commodities prices surged. Anhui Conch Cement Co., China's biggest maker of the building material, climbed 21 percent in Hong Kong. ``It's a big number and it'll add to growth,'' said Mark Tan, who helps oversee about $3 billion in Asian equities at UOB Asset Management in Singapore and has recently been adding to his stock holdings. ``We're not out of the woods yet, but China has the most resources among major economies to boost growth.'' The MSCI Asia Pacific Index gained 3 percent to 89.85 as of 1:45 p.m. in Tokyo. The gauge is still down 43 percent in 2008 as the credit crisis slows global growth, denting demand for Asian exports. Group of 20 leaders yesterday called for lower borrowing costs and higher government spending. Shares in the Asian benchmark are valued at 11 times trailing earnings, compared with a peak of 19 times in November 2007, when investors postulated the region would be able to avoid the fallout from the credit crisis that originated in the U.S. Japan's Nikkei 225 Stock Average surged 5.3 percent to 9,037.18. Australia's S&P/ASX 200 Index gained 1.6 percent, led by Macquarie Group Ltd. as the country's central bank signaled it's ready to cut interest rates. New Zealand's NZX 50 Index rose 1.7 percent following the election of John Key, a former Merrill Lynch & Co. trader, as prime minister. Stimulus Package Futures on the Standard & Poor's 500 Index climbed 1.7 percent today. The gauge advanced 2.9 percent on Nov. 7, the first gain in three days, as traders bet the Federal Reserve will cut interest rates in the face of rising unemployment. China's CSI 300 Index rallied 4.9 percent, while Hong Kong's Hang Seng advanced 2.5 percent. China plans to spend 4 trillion yuan ($586 billion) by 2010 to support growth in its domestic economy as the rest of the world slows, the Beijing-based State Council said yesterday on its Web site. The funds are equivalent to almost a fifth of the nation's gross domestic product. Hitachi Construction, the world's largest maker of giant excavators, rallied 17 percent to 1,226 yen. Kubota Corp., Japan's largest maker of agricultural equipment which reported a doubling in sales to China last week, soared 14 percent to 534 yen. Doosan Heavy Industries & Construction Co., South Korea's largest power-equipment maker, jumped 12 percent to 65,900 won. Chinese `New Deal' Anhui Conch surged 21 percent to HK$32.60. China Railway Group Ltd., builder of half of the nation's railroads, rose 8.7 percent to 5.12 yuan in Shanghai. China Life Insurance Co., the nation's largest insurer, advanced 5.9 percent to 20.31 yuan. ``Beijing's new policy drive of upgrading infrastructure, rural land reforms, and expansion of social welfare is akin to a `New Deal' with Chinese characteristics,'' Jing Ulrich, chairwoman of China equities at JPMorgan Chase & Co., said in an e-mail. ``Despite the growth risks to China's economy, we believe the stock market will start to anticipate the positive impact of the government's fiscal stimulus program.'' BHP added 7 percent to A$29.88. Newcrest Mining Ltd., Australia's largest gold producer, jumped 7.7 percent to A$23.35. Mitsui & Co., Japan's second-largest trading company, climbed 5.5 percent to 995 yen. It gets more than half of its profit from trading commodities. G-20 Action Crude oil for December delivery gained as much as 5.3 percent to $64.30 in after-hours trading today. Copper futures jumped 7.6 percent, while gold added 1.8 percent. China's stimulus measures also helped the Australian and New Zealand dollars to advance as investors resumed bets on high-yielding currencies that had been thrashed during the credit crisis. Macquarie Group climbed 2.1 percent to A$30.77. Mitsubishi UFJ Financial Group Inc., Japan's largest list bank, rose 2.7 percent to 656 yen. The Group of 20 nations said yesterday after a meeting in Sao Paulo that it's ready to act ``urgently'' to bolster economic growth, and that governments must take all measures, including monetary and fiscal policy. Taiwan's central bank lowered its benchmark interest rate for the fourth time in two months, effective today. Australia's central bank today signaled it is ready to cut interest rates further as the weakening economy forced it to slash its growth outlook. Sustained Rally? ``Governments and businesses are working on solutions to the slowdown plaguing economies and earnings, which may bring us some positive surprises,'' said Tomochika Kitaoka, a Tokyo-based strategist at Mizuho Securities Co., said in an interview with Bloomberg Television. ``Given demand is waning, government spending will be a welcome boost to economies.'' Stocks worldwide have fallen this year on concern the global economy will fall into a recession after the collapse of the U.S. mortgage market triggered a credit crisis. The MSCI World Index has lost 41 percent in 2008 in a rout that wiped $29 trillion in stock-market value worldwide. Previous rallies have run out of steam since the beginning of the credit crisis in June 2007 as profit concerns and deteriorating economic data have trumped bets that the worst is over. The MSCI Asia index has climbed 20 percent from a five-year low reached last month. Babcock & Brown ``With lower expectations for global growth and apprehension regarding China's outlook, the stimulus package came as a welcome surprise for the market,'' said Fujio Ando, who helps oversee $365 million at Chiba-Gin Asset Management in Tokyo. ``However, I'd like to see what the exact measures are going to be as some things such as infrastructure spending look similar to what the government has already been saying.'' In the U.S., the jobless rate rose to 6.5 percent in October, the highest level since 1994, the Labor Department reported on Nov. 7. There is a 97 percent chance the Fed will cut its interbank lending rate at its Dec. 16 meeting, according to futures on the Chicago Board of Trade. Babcock & Brown Ltd., the Australian asset manager struggling to repay debt, plummeted 24 percent to 76.5 cents after agreeing to give up its right to manage the investment fund Babcock & Brown Capital Ltd. in return for fees totaling A$50 million ($34.4 million). Babcock & Brown Infrastructure Group, an owner of ports and energy transmission lines, lost 27 percent, while Babcock & Brown Power, an electricity producer, fell 13 percent. To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Chua Kong Ho in Shanghai at kchua6@bloomberg.net.

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