Asian stocks rose to their highest level in more than two years on Monday boosted by strong emerging market fund inflows and last week's positive economic news from China.
In its latest note, EPFR Global said emerging market equity funds ended September with their 18th consecutive week of net inflows. So far in 2010, inflows are 87% of last year's record $44.2bn.
Markets were also boosted by strong Chinese manufacturing data released last Friday.
The purchasing managers' index rose to 53.8, beating expectations of a reading of 52 and reassuring investors about the strength of the world's second largest economy.
The MSCI index of Asian stocks outside Japan advanced 0.5% to the highest level since June 2008.
Hong Kong's benchmark Hang Seng index jumped 1.6%. Chinese markets are shut this week.
Japan's Nikkei reversed earlier losses and was up 0.3% as the yen weakened against the dollar and ahead of a Bank of Japan policy decision on Tuesday. The country's broader Topix lost 0.9%.
The dollar continued to look vulnerable against a basket of currencies, hovering near Friday's eight-month low.
In London, renewed interest in the insurance sector and strong miners nudged the FTSE into positive territory, but Monday morning blues soon kicked in and stocks are now in the red.
Newspaper reports revealed RSA, Resolution, Switzerland's Zurich Financial Services and Germany's Allianz discussed mounting a multibillion-pound break-up bid for Aviva. The FTSE is 0.5% lower at 5,566.
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