Asian stocks rose on Monday as investors took in their stride China's latest attempt to cool inflation and fresh vows to tackle price pressure, while upbeat U.S. economic data helped
shore up the dollar.
Investors appeared intent on ending the year on a bright note, with Asia Pacific stocks up some 10 percent so far this year <.MIAP00000PUS>, outperforming an 8 percent rise in global equities <.MIWD00000PUS>.
The market was also heartened by U.S. data showing a rise in consumer sentiment to six-month highs and a 3.2 percent rise in exports, figures that pointed to a firmer economic recovery.
MSCI's index for Asia Pacific stocks rose 0.3 percent, while the index excluding Japan <.MIAPJ0000PUS> put on 0.45 percent.
The dollar gained ground against a basket of major currencies <.DXY>. Against the yen, it held near 84.00, not far from a two-month high around 84.40 set recently.
The euro slipped 0.1 percent to $1.3189, with worries about debt levels in peripheral euro zone members casting a shadow on its outlook. Traders still expect the currency to retest $1.3000 before long.
Chinese leaders said on Sunday they will ratchet up efforts to quell inflation in 2011 in the wake of data showing the country's inflation soared past forecasts to a 28-month high in November.
Ahead of the data, the Chinese central bank raised the amount of money lenders must keep in reserve for a third time in a month. Beijing, however, held back from raising interest rates, a move many analysts still expect will happen.
Investors are thinking about this issue more sensibly than they may have done so in the past, realizing the broad growth in the Chinese economy is good and policy makers aren't over-reacting in terms of trying to slow the economy down, said Craig James, chief economist at CommSec.
At the same time, you've got more optimism on the U.S. economy.
Australia's S&P 200 index <.AXJO> rose 0.4 percent, Shanghai stock index <.SSEC> was up 0.3 percent, while both South Korea's KOSPI <.KS11> and Japan's Nikkei average <.N225> were little changed.
The market is watching whether there will be another tightening before the end of the year, but for the time being the Nikkei will be supported by the weaker yen, said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Morgan Stanley Securities.
Among the best performers were top Australian bank shares, with investors relieved that reform measures to boost the sector, unveiled on Sunday, were not harsher.
National Australia Bank
(Editing by Miral Fahmy)