Bloomberg/Singapore

Asian stocks posted the biggest weekly advance in a month as US economic data and a surprise interest-rate increase in Australia renewed optimism that the global economic recovery is on track.

Mazda Motor Corp, part owned by Ford Motor Co, surged 16% after it narrowed its full-year loss forecast and US services industries grew after 11 months of contraction. Alumina Ltd rose 7.5% after partner Alcoa Inc reported better- than-estimated profit. Sumitomo Mitsui Financial Group Inc climbed 17% after the government said lenders won’t have to boost provisions for bad loans to struggling small companies.

The MSCI Asia Pacific Index advanced 3.8% to 118.77 this week, its biggest gain since the period to September 11. The gauge has climbed 68% from a five-year low on March 9 as better-than-estimated economic and earnings reports boosted speculation the global economy is recovering from the worst slowdown since World War II.

“We’re all hoping the global recession is winding to a close,” said Rob Patterson, who helps manage $3.4bn at Argo Investments Ltd in Adelaide. “Certainly, the economic indicators are getting less worse, but I don’t imagine the US will be raising rates any time soon.”

Australia’s S&P/ASX 200 Index gained 3.3% as signs of growth prompted the country to become the first among the Group of 20 nations to lift borrowing costs. Hang Seng Index climbed 5.5% as property stocks rallied after Goldman Sachs Group recommended buying Sino Land Co.

China’s Shanghai Composite Index climbed 4.8% when it resumed trading yesterday following an eight-day holiday. Zijin Mining Group Co, China’s largest gold producer, surged 10% after the precious metal rose to a record.

Asian exporters gained after the US Institute of Supply Management said its index of non-manufacturing businesses exceeded the dividing line between expansion and contraction in September for the first time in a year. Reports on Thursday showed US jobless claims fell more than economists estimated and retail sales rose for the first time in 13 months.

Li & Fung Ltd, the biggest supplier of clothes and toys to Wal-Mart Stores Inc and Target Corp, gained 9.6% to HK$32.65. Nissan Motor Co, which got 34% of sales from North America last year, surged 14% to ¥673.