Asian markets rallied in the afternoon session Monday with financials stocks advancing on talks of a possible rescue plan for U.S. bond insurer Ambac. Japan surged 3 percent, but Shanghai shares slumped over 4 percent.
Financial firms such as South Korea's Woori Financial and Japan's Millea Holdings gained after news on Friday of a rescue plan for Ambac Financial, sparked hopes the bond insurer will maintain its top credit ratings, averting sell-downs of the debt it has guaranteed.
Japan's Nikkei 225 Average rose more than 3 percent, posting a six-week closing high as market sentiment improved after a newspaper reported that China's sovereign wealth fund planned to buyas much as $10 billion in Japanese stocks. Another big boost came from financial shares including top insurer Millea Holdings and banks on talk of the Ambac rescue plan.