Asian stocks rose on Tuesday, led by shares of resource companies, as strong U.S. factory data and surging commodities prices offset fears that unrest in Egypt could spread to other parts of the Middle East.
Brent crude oil futures steadied after topping $100 a barrel overnight for the first time since 2008, adding to concerns of a global fuel price spike even as policymakers in many emerging economies struggle to contain soaring food prices.
Data released in China showed manufacturers input prices were rising quickly, keeping pressure on the government to tackle inflation, while figures from South Korea showed consumer inflation in January spiked more than expected at the upper end of the central bank's target.
The euro inched back up near a two-month high after a jump in euro zone inflation fueled expectations of an interest rate increase and as worries about Egyptian unrest abated slightly. The common currency stood at $1.3725.
Japan's Nikkei share index <.N225> and the MSCI index of Asian shares outside of Japan <.MIAPJ0000PUS> each rose 0.3 percent, with shares of energy and resource companies outperforming.
Sentiment was supported by U.S. data showing factory activity in the Midwest hit a 22- year high in January as orders surged and employment prospects brightened, providing further signs that the economy would stay on a solid growth path this year.
Strong earnings reports and increased mergers and acquisitions activity also prompted investors to take a more sanguine view of events in Egypt and return to buying riskier assets.
The Dow Jones industrial average <.DJI> closed up 0.68 percent overnight, while the Standard & Poor's 500 Index <.SPX> gained 0.87 percent.
Brent crude hovered just above $100 after soaring as high as $101.73 overnight, while U.S. crude futures steadied above $92.
Saudi Arabia said OPEC was concerned by unrest in Egypt, where protesters seeking the removal of President Hosni Mubarak planned a million-strong march on Monday, but saw no need for an immediate boost in output as there was no oil shortage.
Stock markets in Shanghai <.SSEC> and Hong Kong <.HSI> were little changed with investors reluctant to stake out fresh positions ahead of long Lunar New Year holidays starting later in the week.
China's official purchasing managers' index fell in January to its lowest level in five months. Though activity continued to expand, input prices rose quickly, keeping pressure on Beijing to tighten policy to contain inflationary pressures.
This indicates that the economic recovery trend is not yet clear, and we may see economic growth slow down a bit, Zhang Liqun, a government researcher, said in a statement accompanying the release.
In Korea, the finance ministry said consumer inflation was expected to hover at the 4 percent range in the current quarter before softening to 3 percent in the second half. The index rose 4.1 percent in January, above a 3.9 percent forecast in a Reuters poll.