Australian Stocks Rise Most in 10 Years on U.S. Rescue Measures

By Shani Raja

Oct. 14 (Bloomberg) -- Australian stocks rose the most in more than a decade, led by banks, energy and resources companies, on speculation U.S. measures to rescue the financial system will help revive the global economy.

Australia & New Zealand Banking Group Ltd. led financial stocks higher, surging 8.4 percent. BHP Billiton Ltd., the world's largest mining company, gained 4.7 percent. The U.S. government will announce a plan to rescue frozen credit markets that includes spending about half of a total of $250 billion for stakes in nine major banks, people briefed on the matter said.

``Confidence is returning preemptively,'' said Will Seddon, who helps oversee about $500 million at White Funds Management in Sydney. ``People don't want to be left out if and when there's a rally on the back of these initiatives by governments around the world.''

Australia's benchmark S&P/ASX 200 Index jumped 5.9 percent to 4,426.50 at 10:55 a.m. in Sydney, the most since Oct. 29, 1997, extending yesterday's 5.6 percent rally. The All Ordinaries Index surged 6.1 percent.

U.S. stocks staged the biggest rally in seven decades. The Standard & Poor's 500 Index rebounded from its worst week in 75 years with an 11.6 percent advance, its steepest since 1939.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.