SINGAPORE (Bloomberg) -- Asian stocks climbed for a third straight week as a China purchasing manager’s index and better- than-expected Australia’s gross domestic product figures spurred optimism the global economy is recovering.

Rio Tinto Ltd., the world’s third-biggest mining company, surged 12 percent after saying it will sell shares and form a joint venture with BHP Billiton Ltd. instead of pursuing an investment from Aluminum Corp. of China. BHP, the world’s biggest mining company, climbed 10 percent. Cnooc Ltd., China’s biggest offshore oil producer, rallied as oil prices rose.
“Positive economic numbers, particularly from China, should provide a further leg up for this rally,” said Khiem Do, head of multi-asset strategy at Baring Asset Management (Asia) Ltd. in Hong Kong, which oversees $7 billion. “Risk appetite is coming back with a vengeance.”
The MSCI Asia Pacific Index advanced 1.3 percent to 103.33 in Tokyo. The gauge, which has surged 47 percent since falling to a more than five-year low on March 9, briefly pared gains after Yonhap News reported on June 2 that North Korea was preparing to launch a medium-range missile.
South Korea’s Kospi index fell 0.1 percent, dropping for a second week as concerns North Korea will step up military tests outweighed signs the global recession is abating.
“The equity market has had such massive gains that it’s ripe for any excuse to trigger a sell-off,” said Nader Naeimi, an investment strategist at AMP Capital Investors in Sydney, which manages about $95 billion. “Geopolitical worries could be one of them.”
------Best performers
Mining and energy companies are the best performers of the MSCI Asia Pacific Index’s 10 industry groups in the past month as prospects of a global recovery fueled optimism that demand for commodities will increase.
China’s Federation of Logistics and Purchasing said on June 1 that its Purchasing Manager’s Index, a gauge of the country’s manufacturing industry, expanded for a third month. That spurred confidence that Premier Wen Jiabao’s 4 trillion yuan ($586 billion) stimulus package is working to boost the Chinese economy, the world’s biggest importer of commodities.
“China has been the only beacon in the intense global economic storm we’ve found ourselves in,” said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management in Sydney. “Continuing strength in China’s economy bodes very well for the Asian region generally.”
Rio Tinto jumped 12 percent to A$72.49. The company said on Friday it will raise $15.2 billion from a rights offering, allowing it to reduce $38.9 billion in debt without selling bonds and shares in its largest mines to Chinalco, as the Chinese aluminum producer is known.
----Oil prices
BHP Billiton climbed 10 percent to A$38.18. The company is paying Rio Tinto $5.8 billion to create a venture covering the companies’ Western Australian iron ore assets.
Cnooc advanced 9.6 percent to HK$11.18. Inpex Corp., Japan’s largest oil explorer, added 7.5 percent to 829,000 yen. Crude oil rallied for a third week, rising 3.2 percent to $68.44 per barrel. Goldman Sachs Group Inc. said prices may reach $85 a barrel by the end of the year as demand recovers and supplies shrink.
Mitsubishi Corp., a Japanese trading house that gets more than half of its profit from commodities, gained 6.1 percent to 1,908 yen in the week. Its closest rival, Mitsui & Co. Ltd., gained 6.7 percent to 1,298 yen.
Harvey Norman Holdings Ltd., Australia’s biggest electronics retailer, gained 5.1 percent to A$3.08 after the government reported on June 3 that the country’s economy expanded 0.4 percent in the first quarter. Economists had expected a 0.2 percent contraction.
----GM bankruptcy
Foxconn International Holdings Ltd., the world’s biggest contract maker of mobile phones, soared 12 percent to HK$6.20. Morgan Stanley lifted its rating on the stock to “overweight” from “equal-weight,” saying the “company’s growth story is underappreciated.”
Honda Motor Co., which makes 51 percent of its revenue in North America, climbed 3.6 percent to 2,850 yen and Hyundai Motor Co., South Korea’s largest carmaker, added 4 percent to 72,100 won. General Motors Corp. filed for bankruptcy on June 1, sparking optimism Asia’s automakers will gain market share.
“For Japanese automakers, GM’s collapse presents a huge opportunity to take market share,” said Fumiyuki Nakanishi, a strategist at SMBC Friend Securities Co. in Tokyo. “All the bad news on GM is out, and that’s a relief to the market.”
Mazda Motor Corp., Japan’s No. 4 carmaker, advanced 12 percent to 277 yen. Nikko Citigroup raised its target price to 350 yen from 257 yen, citing expectations for an earnings recovery in the second half of the business year.