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Asian Markets Rally, Japan Jumps 3% on Exporters

Asian markets rallied Thursday with Japanese shares making their biggest daily gain in a
month, after a monthly gauge of U.S. business spending rose to its highest this year. Tokyo closed 3 percent higher, but China's main index slumped.

A U.S. government report on orders for durable goods -- long-lasting manufactured items --
showed a surprising jump in business investment last month. This boosted U.S. blue-chip computer firms and heavy equipment makers, overshadowing the latest signs of turmoil in the financial sector.

However, with oil prices remaining above $130 a barrel, inflation fears still lurk just below the surface.

Exporters and technology companies provided the biggest lift to Tokyo's Nikkei 225 Average, finishing 3.03 percent higher on hopes U.S. demand for Asian goods will stay strong. Canon and Sony led the advance on a softer yen and the surprisingly strong U.S. durable goods orders. In a broad rally, Aderans Holdings soared after the wig maker's president and most members of its board failed to win re-election at its annual shareholders meeting, the first time a Japanese firm's management has been pushed out led by an activist fund.

Seoul shares shrugged off talk the rumors of North Korean president Kim Jong-il's death, with the KOSPI ending up nearly 2 percent. Shares in Samsung Electronics, the No.1 memory chip maker, rose over 3 percent, boosted by Nomura's decision to upgrade its rating on the stock from "neutral" to "buy" on improving DRAM fundamentals and favorable forex rates. Other tech issues such as LG Electronics and Hynix Semiconductor were also climbing.

Australian shares rose 1.1 percent, boosted by energy firms such as Woodside Petroleum on higher oil prices, while Santos surged 11 percent after it signed a liquefied natural gas deal with Malaysia's Petronas.

Hong Kong stocks closed 0.6 percent higher, tracking firmer regional markets. Airline shares also cheered lower oil prices, with Cathay Pacific and Air China both advancing. But gains were capped by sharp losses in Chinese oil and gas producer CNOOC, while Hong Kong Exchange slid amid news that Hong Kong's anti-corruption watchdog was investigating a suspected stock warrant scam.

Singapore's Straits Times Index ended 0.9 percent higher. Rig-makers Keppel Corp and Sembcorp Marine both advanced after oil prices rebounded from Tuesday's sharp drop due to concerns of a slowdown in world energy demand.

China's Shanghai Composite Index closed 1.7 percent lower as brokerages and banks pulled back from gains made on speculation that authorities might soon announce the long-delayed launch of stock index futures. Financial stocks surged on Wednesday when Fan Fuchun, vice chairman of the China Securities Regulatory Commission, said preparations to launch the futures were proceeding smoothly and that authorities were "basically ready".