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Asia shares rise on Dow, earnings

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SINGAPORE (Reuters) -- Asian shares moved higher on Monday with some indexes following the U.S. stock market into record territory on strong corporate results, a firmer resources sector and waning fears of rising interest rates.

In Japan, a weaker yen and the strength of U.S. blue chips helped drive the Nikkei share average to a five-month closing high. The Nikkei closed up 0.94 percent.

Sony Corp. extended recent gains on a brokerage upgrade. Investors shrugged off news that rival Toshiba Corp. was considering seeking damages from Sony after a recall of Sony-made computer batteries.

South Korean chip maker Samsung Electronics rose after returning higher-than-expected third-quarter results while Hong Kong's main share crossed 18,000 before easing a little.

Indian and Singapore share indices leapt to record highs, while Australian stocks touched a five-month peak.

The dollar held near a 10-month high against the yen after upbeat U.S. data on Friday on retail sales and consumer sentiment further squashed expectations the Federal Reserve would cut interest rates early next year.

That helped push the Dow Jones industrial average to a record high at 11,960.51, while the high-tech Nasdaq hit its highest level since April.

The data underpinned the dollar, which edged up on Monday to 119.75 yen before easing to 119.65, the same level in late New York trade on Friday when it had surged as high as 119.88 yen, its strongest level since mid-December.

"I don't think the dollar has over-extended itself, but there is room for concern, particularly against the yen," said Joseph Kraft, head of forex and interest rates at Morgan Stanley in Tokyo.

Gold hit a two-week high on safe-haven buying as crude oil rose above $59 a barrel, but a firmer U.S. dollar trimmed gains and investors were keen to take profits at higher levels.

Spot gold hit a high of $592.50 an ounce and hovered at $591.20/592.20 by 0646 GMT, up from $588.80/589.80 late in New York.

"That North Korean thing is probably having some sort of positive influence," said commodities analyst Tobin Gorey of Commonwealth Bank of Australia.

"But oil going back up again and the dollar going up again as well is a bit of a draw. It's sort of one is bad, one is good," said Gorey, adding that a firm dollar could limit gold's chance to regain $600 an ounce in the near term.

Samsung delights

Investors are keeping an eye on North Korea after the U.N. Security Council voted unanimously on Saturday to impose financial and weapons sanctions on the reclusive communist state after it said last week that it had conducted a nuclear test.

South Korea's main KOSPI index ended up 0.6 percent, just under the day's high, after Samsung Electronics, the world's biggest memory chip maker and the third-biggest mobile phone maker, reported a 16 percent rise in profit.

Its shares rose as much as 2.2 percent before easing in afternoon trade to end up about one percent.

Hong Kong's benchmark index edged closer to its record high of 18,397.57, underpinned by strong U.S. stocks and the much-awaited initial public offering by top mainland lender Industrial & Commercial Bank of China

ICBC is raising around US$19 billion through a simultaneous Hong Kong and Shanghai listing that is expected to be the world's largest stock offering.

Hong Kong brokerages, which provide margin financing for share applications, predicted that the ICBC deal would prove the most popular share sale ever for Hong Kong individuals, topping the US$34.9 billion in retail orders generated by Bank of China when it went public in June.

Big miners led Australian shares higher on firmer base metal prices. The benchmark S&P/ASX 200 index ended up 0.40 percent to its highest level since May.

Singapore's benchmark Straits Times Index jumped 0.7 percent in early trade to a record high before retreating in the afternoon session.

Indian shares jumped to record highs in early trade and maintained their momentum on hectic buying of domestic technology shares as investors positioned for strong second-quarter results.

At 0639 GMT, the 30-issue benchmark BSE index was 1.45 percent higher at 12,921.56 points.

New Zealand shares were also higher on Monday, with the benchmark NZX-50 Index (.NZ50) rising 16.4 points, or 0.45 percent, to 3,663.01.

Copyright 2006 Reuters. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.

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