Asian stocks surged Monday as retail sales in the United States rose at the beginning of the Christmas gift-buying season, raising sales expectations for the region's exporters and investors' spirits over US economic prospects, according to dpa. The biggest gains by a benchmark index came in South Korea, where the Kospi rose 4.65 per cent to 1,855.33, followed by Hong Kong's Hang Seng Index with a 4.09-per-cent rise to 1,085.53. Positive news from the United States as well as a weakening of the Japanese yen against the US dollar helped the rally, Hong Kong dealers said. Hong Kong's currency is pegged to the greenback. The surge in share prices followed a 2-per-cent spike Friday but still left the Hang Seng Index well down on its peak of just below 32,000 points on October 30. Asian stocks have see-sawed as investors seek to gauge the fallout from the subprime mortgage crisis in the United States, the region's largest export market. Reports on home prices, consumer spending and economic output this week were expected to provide more clues to the health of the US economy, the worlds' largest. The yen's fall also helped Japanese stocks to gains as a lower yen makes the products of the nation's exporters cheaper abroad. Also adding to the positive sentiment in Tokyo were Friday's gains on Wall Street and a report on plans for China to invest in Japanese stocks. The Nikkei 225 Stock Average soared 1.66 per cent to close at 15,135.21 while the broader Topix index of all first-section issues also rose 2.06 per cent to 1,467.03. China Investment Corp, which was launched by the Chinese government in September to manage some of its 1.4 trillion dollars in foreign exchange reserves, was expected to invest some of its 200-billion-dollar assets in Japanese stocks, the Nikkei financial newspaper reported, citing an identified official at the investment fund. In Taiwan, the Taiex rose 2.23 per cent to 8,528.33 while in Singapore, the Straits Times Index was up 2.7 per cent to 3,418.58 as Wall Street's rally Friday egged investors on to buy and as analysts said the index's recent sell-down had been excessive. "There is scope for a surprise rally," said a UOB Kay Hian technical analysis report. In Australia, the All Ordinaries Index broke a four-day losing streak, putting on 2.1 per cent to close at 6,531. It was the first session after the weekend parliamentary election that saw the Labor Party's Kevin Rudd dispatch the 11-year government of John Howard's Liberal-led coalition. The strong showing in Asia and Australia came after the US rise Friday. The broad Standard and Poor's 500 Index gained 1.7 per cent and the blue-chip Dow Jones Industrial Average added 1.4 per cent as shoppers energetically kicked off the holiday shopping season and the sickly dollar boosted companies that do significant business overseas. Earlier in the week, the US indices had been hit by concerns that falling US real-estate prices and tighter credit were squeezing US consumers and economic growth. An anomaly in Monday's trading in Asia was China, where blue-chip stocks fell, led my steelmakers after the China Investment Corp said it would not enter the bidding for the British mining company Rio Tinto Ltd. The Shanghai Composite Index fell 1.46 per cent to 4,958.85 while the Shenzhen Composite Index dropped 1.03 per cent to 1,259.06. The mainland Chinese stock exchanges are largely isolated from the rest of the world by regulations that limit the amount of money foreign investors can put into the two markets as well as how much Chinese investors can invest outside the country. Indian markets, however, posted sharp increases, mimicking earlier gains around Asia. The Bombay Stock Exhange's Sensex was up 2.09 per cent and the National Stock Exchange's S and P CNX Nifty Index rose 2.19 per cent.
