Asian stocks rise amid jump in Japan production

BANGKOK: Asian stock markets rose Monday as a jump in Japan's factory production suggested the region's economic recovery is gathering pace.

Markets in Asia were the first to resume trading after the Christmas holiday and investors focused on regional developments in the absence of cues from the U.S. or Europe.

Oil prices, meanwhile, extended gains above $78 a barrel and the dollar was stronger against the yen and the euro.

Boosting sentiment in stock markets was news that Japan's factory output rose the most in six months in November as a recovery in export demand from Asia boosted production of cars, flat screen televisions and other products in the world's second-biggest economy.

Japan's recovery from the world economic crisis has been undermined by deflation and strong yen but an improvement in demand for exports has raised hopes it can avoid slipping back into recession next year. The figures also showed that China's lavish stimulus spending is aiding the region's recovery.

In Tokyo trade, the Nikkei 225 stock average was up 129.42 points, or 1.2 percent, to 10,624.13 and Hong Kong's Hang Seng advanced 166.28, or 0.8 percent, to 21,638.28. South Korea's Kospi was flat.

China's Shanghai benchmark jumped 1.2 percent to 3,180.14 while Taiwan's market gained 1 percent and Thailand's SET index rose 0.4 percent. Markets in Australia and New Zealand remained closed.

Stock futures augured modest gains Monday on Wall Street. Dow futures were up 17, or 0.2 percent, at 10,483 and S&P futures added 1.4, or 0.1 percent, to 1,123.40.

Oil prices extended gains above $78 a barrel in Asia ahead of inventory figures later in the week that could send it through the $80 mark.

Benchmark crude for February delivery rose 48 cents to $78.53 in electronic trading on the New York Mercantile Exchange. The contract rose $1.38 to settle at $78.05 on Thursday, the first time in more than a month that it closed above $78. Oil markets were closed on Friday for Christmas.

In currencies, the dollar rose to 91.51 yen from 91.18. The euro fell to $1.4382 from $1.4396.