Asian markets surge

SEOUL (South Korea) - ASIAN stock markets rose Monday, led by Taiwan, on optimism about emerging strength in the US economy and easing fears about swine flu.

Taiwanese shares soared on hopes for improved business ties with China. The benchmark index surged 337.83 points, or 5.6 per cent, to 6,330.40, building on strong gains last week, when the island's government decided to allow mainland institutional investors to invest in the Taiwan stock market.

Hong Kong's Hang Seng index surged 648.11 points, or 4.2 per cent, to 16,169.10. The Shanghai Composite index in mainland China rose 2.8 per cent, while India's Sensex jumped 4.7 per cent.

Wall Street advanced modestly Friday, but closed out their best one-month performance in nine years amid hopes that the American economy - a vital export market for Asia - might be stabilizing.

'There are hopeful signs that the US will weather the financial crisis,' said Francis Lun, general manager at Fulbright Securities in Hong Kong.

US manufacturing activity in April posted its best showing since September, when the financial crisis erupted. The performance was driven by a rise in new orders reflecting higher business and consumer spending. US stock index futures were also higher, pointing to more gains Monday.

Australia's market rose 2.3 per cent, while South Korea's Kospi index climbed 2 per cent to 1,396.61, its highest level this year, led by gains in local banks including KB Financial Group, the holding company for top South Korean lender Kookmin Bank.

'The market's perhaps turned a corner,' said Burrell Stockbroking director Richard Herring in Brisbane, Australia. 'A few months ago, it was just looking for bad news and now it's looking for more positive news.' Japan's financial markets will be closed Monday through Wednesday for the 'Golden Week' holidays.

Taiwan shares soared following the signing of a financial cooperation agreement last week with China that will pave the way for banks in Taiwan and China to set up branches in each other's territory. Taiwan will also allow mainland institutional investors to invest in the Taiwan market for the first time. Individuals, however, will still be barred.

The gains were led by financial and electronics. Cathay Financial Holdings jumped 6.9 per cent. -- AP