Investors seemed encouraged after President-elect Barack Obama urged congressional leaders on Saturday to move quickly on recovery measures that aides say could cost as much as US$775 billion (S$1.14 billion), including a reported US$300 billion in possible tax cuts.

Also helping sentiment, Chinese Premier Wen Jiabao said over the weekend that Beijing would enact new measures to help the steel and auto industries. That comes on top of a massive stimulus package announced in November.

In a shortened half-day session, Tokyo's Nikkei 225 stock average gained 183.56 points, or 2.1 per cent, to 9,043.12, its first finish above the 9,000-point line since Nov 10.

In greater China, Hong Kong's Hang Seng climbed 3.5 per cent to 15,563.31 and Shanghai's key index gained 3.3 per cent to 1,880.72.

Singapore's benchmark jumped 4.5 per cent, with stock measures in Taiwan, India, South Korea, Malaysia and Thailand higher as well.

Europe followed Asia higher, though gains were smaller. Britain's FTSE 100 rose 0.4 per cent, Germany's DAX advanced 0.8 per cent and France's CAC 40 added 0.4 per cent.

The upbeat mood came after global markets rang in the new year with a strong advance despite more dismal economic news, including evidence that manufacturing in the US, Europe and China was deteriorating amid the slowdown.

Though increasingly optimistic markets will fare better this year after the relentless selling in 2008, investors are bracing for a difficult first half, when company earnings and economic data could prove especially bleak. Still, the market's resilience of late could be a sign that many have already started positioning for a possible turnaround in the world economy and equities prices later in the year.

'We are still trading more on sentiment than fundamentals, and the sentiment is that fiscal stimulus will allow the economy to recover,' said Mr Dariusz Kowalczyk, chief investment strategist for CFC Seymour in Hong Kong.

'The market is relatively cheap, and with investors hoping for a recovery in the global economy in the second half, it makes sense to buy now before that happens.' Global markets are likely to be tested this week with fresh US data on everything from jobs to manufacturing and car sales in the world's largest economy.

The session was the year's first for a number of Asian countries, including Japan, where markets were still closed on Friday, and volumes were higher across the region as traders returned from the holidays.

Rising commodities prices lifted energy and metal producers, and Japanese shares got a boost from a weakening yen, which helps the country's exporters.

Sony rose 2.5 per cent and electronics giant Panasonic Corp gained 2.5 per cent. Toyota jumped 3.6 per cent and Honda Motor Co added 2.7 per cent.

In his weekend radio address, Mr Obama urged Congress to move quickly on an economic recovery plan, which aims to create 3 million jobs. Congressional aides briefed on the measure say it probably would include tax cuts of US$500 to US$1,000 for middle-class individuals and couples; Mr Obama advisers told The New York Times on Sunday that tax cuts for workers and businesses could total US$300 billion.

Confidence also got a boost from Wall Street's gains on Friday, when the Dow Jones industrial average jumped nearly 3 per cent, closing above 9,000 for the first time in two months as investors shrugged off a weaker-than-expected report on manufacturing.

Wall Street futures were modestly lower, pointing to a weak opening on Monday in New York. Dow futures were down 22 points, or 0.3 per cent, at 8,936 and S&P 500 futures were off 0.8 points, or 0.1 per cent, at 924.60.

In India, Mumbai's Sensex climbed 2 per cent after the government announced plans late on Friday to lower key interest rates by 1 percentage point and boost spending to arrest the country's slowing economic growth. It was the second stimulus package announced in the past month.

In Japan, financials soared amid reports that the government might purchase bad loans from banks, with Mizuho Financial Group up 13.3 per cent and Sumitomo Mitsui Financial Group gaining 11. 4 per cent.

Crude oil price rose in Asia trade, with light, sweet crude for February delivery up 26 cents at US$46.60. The contract soared last week to settle on Friday at US$46.34, up US$1.74, amid spiraling violence in Gaza and expectations of Opec productions cuts.

In currencies, the dollar rose to 92.89 yen, up from yen 91.79, and the euro skidded to US$1.3687, down from US$1.3918. -- AP

TOKYO
JAPANESE share prices closed 2.07 per cent higher on Monday, ending above the 9,000 point level for the first time in almost two months after a recent rally on Wall Street.

The benchmark Nikkei-225 index gained 183.56 points to 9,043.12 after a half-day session.

KUALA LUMPUR
Share prices on Bursa Malaysia were firmer at close today on follow through buying in selected heavyweights, particularly plantation stocks, dealers said.

The Kuala Lumpur Composite Index (KLCI) ended 26.30 points or 2.941 per cent higher at 920.66, the highest since the market went on a downtrend last year, pushed by gains mostly in IOI Corporation and Sime Darby. It opened 7.84 points higher at 901.84.

The Industrial Index went up 51.84 points to 2,140.63, the Finance Index surged 145.69 points to 7,070.90 and the Plantation Index jumped 352.29 points to 4,776.03.

The FBMEmas was 182.50 points higher at 6,039.88, the FBM30 rose 167.30 points to 5,931.19, the FBMMesdaq increased 142.62 points to 3,489.48 and the FBM2BRD surged 49.79 points to 4,081.92.

Gainers thumped losers by 530 to 119 while 131 counters were unchanged, 472 untraded and 27 others suspended.

Turnover surged to 845.963 million shares valued at RM1.019 billion from Friday's close of 507.412 million shares worth RM682.421 million (S$286.36 million).

HONG KONG
Hong Kong share prices closed 3.5 per cent higher on Monday, buoyed by a rally in Shanghai and strong performances by other Asian markets, dealers said.

The benchmark Hang Seng Index closed up 520.50 points at 15,563.31. Turnover was HK$49.42 billion (US$9.3 billion).

SHANGHAI
Chinese shares closed up 3.29 per cent on Monday led by steel and auto shares after Premier Wen Jiabao promised measures to help those sectors, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, closed 59.91 points higher at 1,880.72 on turnover of 46.1 billion yuan (S$9.88 billion).

The Shanghai A-share index rose 62.92 points, or 3.29 per cent, to 1,974.72 on turnover of 46.0 billion yuan, while the Shenzhen A-share index gained 18.72 points, or 3.22 per cent, at 600.23 on turnover of 24.5 billion yuan. -- BERNAMA, AFP, AP