By Patrick Rial and Masaki Kondo Nov. 25 (Bloomberg) -- Asian shares rose, led by commodity and financial companies, as the U.S. government’s rescue of Citigroup Inc. shored up confidence in banks and the world’s biggest economy. BHP Billiton Ltd., the world’s largest mining company, soared 9.9 percent in Sydney, the most in a month, after oil and copper yesterday jumped more than 5 percent. Posco, Asia’s third-largest steelmaker, added 7.4 percent in Seoul. Mizuho Financial Group Inc., Japan’s second-biggest listed bank, climbed 9.1 percent as the cost of protecting against default declined. “The U.S. government has made it clear it won’t allow Citigroup to fail, so investors believe the financial crisis won’t deepen,” said Naoki Fujiwara, who oversees about $720 million at Shinkin Asset Management Co. in Tokyo. “It’s unlikely commodity prices will just continue falling because demand is still there in the global market.” The MSCI Asia Pacific Index added 3.4 percent to 79.48 as of 11:23 a.m. in Tokyo. About 10 shares climbed for each that retreated on the gauge as all 10 industry groups posted gains. Japan’s Nikkei 225 Stock Average rose 4.2 percent to 8,246.08. UEM Land Holdings Bhd. led gains by Malaysian property stocks after the nation’s central bank cut interest rates for the first time since 2003. Indexes in Hong Kong and the Philippines rose more than 4 percent. MSCI’s Asian index is down 50 percent this year. Previous rallies sparked by interest rate cuts and government bailouts have fizzled as almost $1 trillion in credit losses and writedowns battered financial firms and dragged the global economy toward recession. That’s left about half of Asia’s stocks trading at below book value. U.S. Rally U.S. stocks surged yesterday, with the Standard & Poor’s 500 Index rising 6.5 percent. That capped its biggest two-day rally since 1987, after the government decided to protect Citigroup from losses on troubled mortgages. S&P 500 futures were 0.1 percent lower in Asian trade. BHP rallied 9.9 percent to A$25.70, the biggest advance since Oct. 21. Fortescue Metals Group Ltd., Australia’s third- largest iron ore producer, soared 17 percent to A$1.98. Cnooc Ltd., China’s biggest offshore oil and gas producer, rose 8.3 percent to HK$5.59 in Hong Kong. Crude oil for January delivery climbed 9.2 percent to $54.50 a barrel in New York yesterday, the biggest one-day advance since Nov. 4 as the Citigroup rescue plan bolstered confidence banks will loosen lending and demand for raw materials will increase. Copper futures for March delivery gained 5.9 percent and gold rose to a five-week high. U.S. Support Exporters advanced on optimism U.S. stimulus measures will sustain demand for Asian products. Posco added 7.4 percent to 319,500 won. LG Display Co., the second-largest liquid-crystal display maker, rose 6.5 percent to 18,950 won. Canon Inc., which generates most of its earnings overseas, gained 7.6 percent to 2,900 yen. Daihatsu Motor Co. rallied 5.6 percent to 794 yen while Honda Motor Co. advanced 5.4 percent to 2,055 yen. The automakers were rated “overweight” in new coverage by Barclays Capital. The U.S. government is prepared to provide more than $7.76 trillion, about half of the country’s annual output, to thaw the financial system and stimulate the economy, according to data compiled by Bloomberg. Mizuho gained 9.1 percent to 247,500 yen. Australia & New Zealand Banking Group Ltd., Australia’s third-largest, rose 7.6 percent to A$13.88. Industrial & Commercial Bank of China, the nation’s biggest lender, advanced 6 percent to HK$3.55. The cost of protecting Japanese and Australian corporate bonds from default declined, according to traders of credit- default swaps. The Markit iTraxx Japan index was quoted 55 basis points lower, while the iTraxx Australia fell 20 basis points. Citi Rescue Citigroup received a government support package which injects $20 billion of capital and shields the bank from losses on $306 billion of mortgages, commercial loans and other securities. The bank’s stock soared 58 percent yesterday, rebounding from last week’s 60 percent plunge. The funds also helped other financial shares climb, with a gauge of banks included in the S&P 500 surging 19 percent. UEM, developer of Malaysia’s biggest property project, added 3.4 percent to 61 sen in Kuala Lumpur. Malaysian Resources Corp., the nation’s biggest office builder, rose 5.2 percent to 70.5 sen. Malaysia’s central bank cut interest rates by a quarter of a percentage point, the first decrease since 2003, and lowered the amount lenders need to set aside as reserves to help shield the economy from a global recession. Undervalued Sanyo Electric Co. lost 5.6 percent to 151 yen after the Yomiuri newspaper said Panasonic Corp. may bid for a majority stake in the maker of rechargeable batteries at 120 yen per share. Harvey Norman Holdings Ltd., Australia’s biggest furniture and electronics retailer, slumped 9.4 percent to A$2.21 after the company said first-quarter earnings fell 32 percent as slowing consumer spending curbed sales. To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

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