Asian markets surged to close firmly in the green Monday, with the exception of China's Shanghai Composite index, reversing four straight weeks of losses. Tokyo gained 1.6 percent, but South Korea came out tops with a whopping 4.7 percent advance.
Crude oil rose to near a record high within striking distance of $100 a barrel, buoyed by a persistently weak U.S. dollar and forecasts of colder U.S. weather, while strong equity markets weighed on safe-haven government bonds.
Banks, hit hard by fears of credit losses last week, were in favor with gains seen nearly across the board. Australia's Macquarie Group, South Korea's Kookmin Bank and Japan's Mitsubishi UFJ all advanced. Investors also bought major exporters sending Canon and Sony higher.
Major miners were on the rebound after the recent sell-off, with BHP Billiton and take-over target Rio Tinto both climbing. The two benefited from a report in a Chinese newspaper that China's sovereign wealth fund was considering bidding with the country's major steel producers to offer about $200 billion for Rio. The fund, China Investment Corp, denied the report.
A separate report in Japan's Nikkei newspaper said the $200 billion fund was expected to invest some of its assets in Japanese stocks, lending support to beaten down Tokyo stocks and lifting the yen more than 1 percent.
Japan's Nikkei 225 Average accelerated its advance, closing 1.6 percent higher, after the Nikkei daily's report, boosting hopes for new demand for the underperforming market. A robust start to the U.S. holiday shopping season, providing some reassurance about the health of the U.S. economy, also buoyed Sony and other high-tech exporters and automakers such as Honda Motor.
South Korea's KOSPI closed a whopping 4.7 percent higher as shipbuilders including Hyundai Heavy Industries jumped after STX Group's upbeat outlook for next year bolstered expectations for better earnings of the sector. Exporters such as LG Electronics gained on bustling activity at the start of the U.S. holiday season and banks also rose on eased concerns over the credit crunch.
Australian shares ended 2.2 percent higher, recouping well over half the losses posted in the previous four sessions, with resource firms such as BHP Billiton leading gains on stronger metals and oil prices. Major banks, which have been battered by credit concerns, also gave the market a further boost, while a clear victory for the opposition Labor Party in Australia's weekend general election cleared away any concern over political instability
Hong Kong stocks took cues from strong gains in U.S. equity markets to rally 4.1 percent with oil and property issues leading the way. But China BlueChemical was among the morning's worst-performing large-caps after it said two of the fertilizer maker's plants, which were forced to shut this month, may not resume production until January.
Singapore's Straits Times Index ended 2.8 percent higher as financial stocks tracked Wall Street's Friday gains. Singapore Exchange, DBS Group and United Overseas Bank were all higher.
China's Shanghai Composite Index finished lower by 1.5 percent despite a strong start and the release of part of the 3.4 trillion yuan in subscription funds for China Railway's Shanghai IPO.