Most Asian indexes rose, with the Chinese market's strong performance offering support to its peers in the region but investors continued to keep a wary eye on the debt problems in the euro zone.
The key U.S. indexes rose by between 1.1 percent and 1.5 percent on Friday, as investors stepped up to buy shares hammered by days of selling on fear the euro zone debt crisis would spill over and hamper global growth.
Sentiment on Wall St was helped by rising bank shares, after the U.S. Senate passed a bill overhauling financial regulation, ending months of wrangling and uncertainty.
At the weekend, the Bank of Spain said it was taking over the running of Spanish savings bank CajaSur after its planned merger with another of the country's small lenders failed. That weighed on the euro already hurt by worries about the impact of deep public spending cuts in Greece, Spain and Portugal.
Chinese Shares Jump
China's key stock index ended 3.5 percent higher on Monday, posting its biggest one-day percentage rise in more than seven months, led by property shares on hopes that government tightening measures would slow.
The Shanghai Composite Index ended at 2,673.4 points, its highest close in more than a week and rebounding from last Friday's tumble to a one-year intraday low.
Real estate developers rose after a local newspaper quoted a government researcher as saying a new property tax would not be implemented within the next three years.
The researcher from China's state planning agency later denied the report, which was carried in the China Times, a Beijing-based tabloid newspaper.
Property firm Gemdale, the most active share in Shanghai, rose 6.9 percent, while sector heavyweight China Vanke, the most-active share on the Shenzhen exchange, was 4.2 percent higher.
Nikkei Ends at 5-Month Lows
Japan's Nikkei 225 average edged down 0.3 percent to its lowest close in more than five months, as investors refrained from taking on more risky assets without assurance that a recent stock slide is over.
The benchmark Nikkei shed 26.14 points to 9,758.40, its lowest close since early December, after earlier falling as far as 9,693.07.
The broader Topix was flat at 880.01.
Most bank shares rose in the wake of gains by their U.S. peers, which led Wall Street higher a day after the U.S. Senate approved a sweeping regulatory overhaul of Wall Street firms that analysts said appeared less onerous than many had feared.
Mizuho Financial Group rose 2.5 percent to 164 yen and Sumitomo Mitsui Financial climbed 0.6 percent to 2,718 yen.
Exporters weighed on the market due to the strength of the Japanese yen, with Canon losing 0.6 percent to 3,700 yen and Honda Motor down 0.6 percent to 2,806 yen.
The dollar was flat at 90.2 yen while the euro shed 0.3 percent to 112.8 yen in afternoon trade.
Shipping firms Kawasaki Kisen K.K. and Mitsui O.S.K. Lines moved higher after Nomura Securities upgraded both to "buy" from "neutral" and raised their target prices, citing expectations for profits from container shipping in the year ending March 2011.
Kawasaki Kisen, whose target price was raised to 415 yen from 355 yen, rose 3.9 percent to 343 yen. Mitsui O.S.K. Line rose 2.6 percent to 624 yen, with its target price hiked to 800 yen from 605 yen.
Renown shares were untraded due to a glut of buy orders at 156 yen, up 10.6 percent from Friday's close, after the Nikkei business daily reported Chinese textile group Shandong Ruyi would take a stake of about 40 percent in the apparel maker.
In a statement, Renown said the report was not something it had announced and a company spokesman declined to comment further.
Seoul Closes Higher
Seoul shares erased earlier losses to end 0.3 percent higher, helped by gains in shipyards and steelmakers but heightened tension with North Korea dented market sentiment.
The Korea Composite Stock Price Index (KOSPI) ended up 0.3 percent at 1,604.93 points, after sinking to as low as 1,585.62 points, its lowest level since late February.
Shipbuilders rose following prolonged losses, helped further by gains in the Baltic Dry Index, which tracks the cost of shipping key commodities.
Samsung Heavy Industries advanced 3.5 percent. Hyundai Heavy Industries rose 3.99 percent, following news on Sunday it had won a $600 million deal to supply electric transformers from Southern California Edison.
Key tech plays such as Hynix Semiconductor rose 1.4 percent and LG Display climbed 1.8percent.
Financials were mostly higher, KB Financial Group gained 2.9 percent while Korea Exchange Bank jumped 4.5 percent.
POSCO, the world's No. 4 steelmaker, jumped 4.8 percent after prolonged losses this month and amid strengthening expectations supplies from China may contract.
Analysts said market reaction to a speech delivered by South Korean President Lee Myung-bak earlier on Monday on the North's sinking of a South Korean naval vessel had a limited impact on stocks.
President Lee said on Monday North Korea would pay the price for sinking a South Korean naval ship and that the South would invoke its right to defend itself if Pyongyang waged aggression again.
Australia Gains 2%
Australian stocks rose 2.1 percent, boosted by a Chinese newspaper said the government would delay introducing a controversial property tax that would have hurt metals demand for housing construction.
Local mining stocks leapt on the report, even after it was denied by the Chinese government researcher who was quoted in the report.
Mining gaints BHP Billiton rose 2.8 percent while rival Rio Tinto advanced 3.8 percent. Newcrest Mining ended 2.2 higher.
Financials also supported the market, led by ANZ's 4.3 percent jump. Other banks rose between 1.8 to 3.9 percent.
The benchmark S&P/ASX 200 index gained 90 points to close at 4,395.4 .
New Zealand's benchmark NZX 50 index rose 0.4 percent to close at 3,061.2. That was despite the second-biggest stock, Telecom Corp of New Zealand, ending down 1.5 percent after
saying it would consider splitting itself.
Hang Seng Rises
Hong Kong stocks gave up opening losses to climb steadily, as gains in the Chinese market boosted sentiment.
The Hang Seng Index rose 0.9 percent after opening 0.3 percent lower to 19,489 points. The index ended the week at 19,546, far below the key 250-day moving average support level of 20,651.
Property plays such as China Resources Land soared 6 percent and China Overseas Land and Investment jumped 5.8 percent.
Banking stocks also chalked up healthy gains, with China Merchants Bank up 2.7 percent and ICBC climbing 2.1 percent.
Taiwan Climbs 1.2%
Taiwan stocks rose for the first time in a week on Monday, adding 1.2 percent after gains on Wall Street and a surge in Chinese stocks, with investors snapping up recently beaten-down tech exporters.
But analysts said the rise could be short-lived due to lingering euro zone woes.
The main TAIEX share index ended up 85.02 points at 7,322.73, posting its best daily percentage gain in about a week.
United Microelectronics Corp (UMC),the worlds' No.2 contract chip maker, advanced 2.1 percent, tracking a 7.5 percent surge in its American depository receipts on Friday.
Acer, the world's No.2 PC brand, rose 0.9 percent, recovering from an 8 percent slump last week.
Sime Darby Weighs on KLCI
In Southeast Asia, Singapore's STI rose 1.2 percent, supported by gains in financials.
The country's big banks, DBS, UOB OCBC, advanced 1 percent each, as they took a cue from U.S. stocks, where banks helped Wall Street snap a three-day losing streak on bets that a financial regulation bill pending in the U.S. Congress won't be as onerous as feared.
Singapore Airlines climbed 0.7 percent, on news that the world's second most valuable airline posted an almost seven-fold jump in fourth-quarter profit, as passenger and cargo demand rebounded.
The Malaysian market fell 0.7 percent, extending losing streak to seventh straight session.
The benchmark KLCI pared losses after falling 1.4 percent at 1267.06 points, with blue chips such as Maybank losing 0.9 percent.
Shares of Sime Darby underperformed, dropping as much as 4.7 percent, after a local newspaper reported that acting CEO Azhar Abdul Hamid warned there could be more provisioning in its energy and utilities division.
Sime Darby is due to release its third-quarter financial results on May 27.
Thailand's stock market resumed trade today as calm returned to the capital Bangkok after being closed since last Wednesday. Anti-government protests in Bangkok had escalated to violent street battles and damaged sentiment.
The key SET index declined 2.3 percent at 747.41 in active trade.
Shares in Central Pattana, which operates Central World, Southeast Asia's second largest department store, sank 8 percent, after riots last week badly damaged its mall.