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Asian Markets Mostly Higher; Rio, BHP Deal Lifts Resources

Asian stocks rose Friday as hopes for a global economic recovery drove up appetite for riskier assets, but traders were cautious ahead of U.S. monthly job data. Resource shares were among the leading gainers after oil prices surged to a seven-month high on hopes that the global recession had bottomed out.

Australian-listed shares of BHP Billiton and Rio Tnto surged over 8 percent after they announced they will combine their major Australian iron ore operations. The news pushed up Australia's main stock index more than 1 percent. The deal effectively scuppered a $19.5 billion bid by China's Chinalco to secure a stake in debt-laden Rio.

U.S. nonfarm payrolls data due later in the day are expected to show U.S. employers cut 520,000 jobs in May, lower than 539,000 in April, but the unemployment rate is forecast to rise to 9.2 percent from 8.9 percent in April. A much worse-than-expected report could dampen expectations that the worst is over for the global economy, hopes that have pushed stock markets from Seoul to London sharply higher since early March.

In currency markets, investors switched to higher-yielding plays, though moves were tempered ahead of the U.S. jobs data. The dollar index, a gauge of the greenback's performance against a basket of six major currencies, fell 0.1 percent to 79.401. The euro edged up 0.1 percent from late U.S. trade to $1.4196, crawling towards a five-month peak of $1.4339 hit on EBS earlier this week after the ECB kept rates on hold. U.S. crude futures rose above $69 a barrel, building on a rally of more than 4 percent on Thursday.

Japan's Nikkei 225 Average rose 1 percent, lifted by resource and energy shares amid a rise in commodity prices as U.S. data added to hopes the economic
slump is waning. Mitsubishi Motors climbed 2.3 percent after the company said it had priced its plug-in vehicle lower than a rival electric car.

South Korea's KOSPI closed 1.2 percent higher, with technology issues including LG Display
rallying on strengthening earnings hopes, while banks advanced following their latest steep losses.

Australian stocks rose 0.9 percent as investors rushed to buy Rio Tinto and rival BHP Billiton after they agreed a $116 billion iron ore joint venture and Rio announced a heavily discounted
rights issue. Both miners gained 8 percent. Most bank stocks slipped as miners grabbed the limelight, many rallying to levels not seen since late 2008.

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In markets still trading, Hong Kong and China shares drifted lower, with investors selling some shares after making recent hefty gains, but energy and metal stocks were helped by firmer commodity prices, propped up by a set of encouraging U.S. economic data.

Shares in Aluminum Corp of China (Chalco) dropped 1.7 percent in Hong Kong after Rio Tinto scrapped its proposed $19.5 billion tie-up with the Chinese company's parent firm, Chinalco.
However the Shanghai-listed scrip, which is trading at a more than 70 percent premium to the Hong Kong shares, rose 2.2 percent to 12.38 yuan as analysts asserted there will be no fundamental impact on Chalco's operations from the scuttled deal.

Singapore's Straits Times Index gained 0.8 percent with financials such as United Overseas Bank leading the advance.