SINGAPORE (Bloomberg) -- Asian stocks rose to a record, led by mining companies and steelmakers, on expectations this year's record pace of takeovers will be sustained.

Rio Tinto Group, the world's third-largest mining company, surged to a record on speculation it's the target of BHP Billiton Ltd. Sumitomo Metal Industries Ltd., Japan's No. 3 steelmaker, climbed after the Financial Times said Arcelor Mittal may offer about $4.5 billion for U.S.-based AK Steel Corp.

Proposed global mergers and acquisitions surged to $1.9 trillion this year, 58 percent ahead of 2006's record pace. Suggestions of further takeovers helped lift the Morgan Stanley Capital International Asia-Pacific Index on speculation there will be more reorganization in the region. “A lot of M&A is going on in the commodity-related sector and people see value in this area,” said James Chua, who helps manage about $200 million at Phillip Capital Management in Singapore. “These days, almost anything is a potential target for M&A and this will be a short-term catalyst for markets.”

Citic Securities Co. led China's CSI 300 Index down 1.8 percent from a record as some investors judged excessive the rally that's made them Asia's best performers this year.

MSCI's regional index advanced 0.5 percent to 149.93 at 2.36 p.m. in Tokyo, a record. A measure of mining companies and steelmakers rose 1.3 percent, the biggest gain among the benchmark's 10 industry groups.

In Japan, the Nikkei 225 Stock Average climbed 0.5 percent, while the broader Topix index added 0.7 percent. Shipping companies rose after Kawasaki Kisen Kaisha Ltd. and Nippon Yusen K.K. forecast profit expansion for this business year.

Indexes also advanced in Australia, South Korea, New Zealand, Hong Kong, Indonesia and the Philippines. -----------Rio jumps

U.S. stocks retreated for the first time in a week on Tuesday, buffeted by weaker-than-forecast earnings at power companies and predictions that Americans will spend less for homes and consumer goods in the months ahead. The Standard & Poor's 500 Index lost 0.1 percent, snapping a five-day advance.

Rio Tinto surged 9.1 percent to A$97.90, a record. BHP, the world's biggest mining company, added 1.8 percent to A$31.73. The shares jumped on speculation BHP has “approached them at A$110 and got rejected,” Marcus Padley, author of trading newsletter Marcus, said in an e-mailed report.

BHP could afford a $100 billion takeover bid and would be able to pay off the debt in five to six years, Citigroup Inc. analyst Clarke Wilkins said in a May 4 note. Ian Head, a Melbourne-based spokesman for Rio, declined to comment on the share gains, citing company policy to not respond to “market speculation.” --------------------‘Ongoing theme’ “A takeover by BHP is feasible given both companies are closely affiliated with Australia,” said Michael Birch, who helps manage $133 million at Wallace Funds Management in Sydney, including Rio and BHP shares. “The rumor will help lift the whole mining sector. Fund managers are likely to want more than the rumored A$110 a share.”

Sumitomo Metal, Japan's third-largest steelmaker, climbed 5.2 percent to 667 yen. Nippon Steel Corp., Asia's biggest steelmaker, rose 2.3 percent to 877 yen. Posco, Asia's fourth largest, added 0.7 percent to 409,000 won in South Korea.

Shares of AK Steel, the No. 3 U.S. steelmaker, jumped 9.2 percent after the Financial Times said Arcelor Mittal, the world's largest, may offer as much as $40 a share for the company. There were a record $78 billion of mergers and acquisitions last year in the steel industry, including Mittal Steel Co.'s $38.3 billion takeover of Arcelor SA.

“The worldwide consolidation of the steel industry is an ongoing theme,” said Daisuke Yoshida, who helps look after $9 billion at Fuji Investment Management Co. -------------Dongkuk steel

Dongkuk Steel Mill Co., South Korea's third-largest steelmaker, rose 0.9 percent to 28,950 won. Dongkuk may raise prices for ship plates by 5 percent to 10 percent on strong demand for ships and tight supply of plates, Son Yong Suk, a Seoul-based analyst at UBS, said in a report on Wednesday.

Citic Securities Co., China's biggest listed brokerage, fell 6.6 percent to 55.90 yuan. Youngor Group Co., the No. 1 maker of men's clothing by sales, lost 3.2 percent to 14.38 yuan.

The benchmark's 14-day relative strength measure for the 300 index, a moving average based on whether the gauge rose or fell, was at 83. A reading above 70 signals to some investors that a fall is likely. “Prices have been reaching records every day and investors are becoming nervous,” said Yi Yangfang, who helps manage the equivalent of $5 billion at GF Fund Management Co. in the southern city of Guangzhou. “They want to take profits at this stage.” --------------Japanese shipowners

Kawasaki Kisen, Japan's third-largest shipowner, surged 9.6 percent to 1.465 yen. Nippon Yusen, Japan's biggest shipping line, climbed 4.1 percent to 1,110 yen.

Kawasaki Kisen forecast its net income will rise 22 percent to 63 billion yen ($526 million) this fiscal year. Sales will probably rise 11 percent to 1.2 trillion yen, and operating profit will surge 53 percent to 94 billion yen, it said.

Nippon Yusen projected net income will rise 26 percent to 82 billion yen this fiscal year. Sales will probably rise 3.5 percent to 2.24 trillion yen, and operating profit will gain 31 percent to 137 billion yen, it said in a statement.

Olympus Corp. surged 3.6 percent to 4,350 yen. The world's biggest maker of endoscopes said yesterday operating profit for the year ended in March was 98.7 billion yen, 3.9 percent more than the average estimate of analysts surveyed by Bloomberg. The company also said net income will probably rise to a record 50 billion yen this year. ------------SingTel earnings

Elsewhere, Singapore Telecommunications Ltd., Southeast Asia's largest phone company, dropped 1.8 percent to S$3.36. Net income in the fourth quarter to March 31 fell 41 percent from a year earlier to S$989 million ($652 million), the company said on Wednesday. That's its first profit decline in two years.

“Market expectations are very high for corporate earnings and there's intolerance for bad news,” said Teng Ngiek Lian, who manages about $2 billion at Target Asset Management in Singapore.