Malaysian shares, whipped about recently by new currency controls and political turmoil, rocketed more than 25 per cent, while the Tokyo and Seoul exchanges spurted nearly four per cent. Singapore stocks jumped almost six per cent, Bangkok shares rose three per cent, and Manila shares closed up two per cent.

Hong Kong's Hang Seng Index shot up 566.03 points, or 7.56 per cent, to 8054.50 by 0536 GMT on a firmer yen and lower interest rates delivered by government measures to strengthen its currency-board monetary system. But brokers were cautious on the longer term outlook, given the large equity positions the government now held, they said.

In India, Sensex finished at 3051.83 with a handsome gain of 76.83 pointscompared to the previous level of 2975.10. The BSE-100 index ended at 1356.37 as against the last close of 1323.25 points, showing a rise of 33.12 points. FIIs picked up the shares of Larsen, SBI, Tata Tea, Zee Telefilms, IPCL, Hindustan Lever and others. However, domestic institutions sold small lots of shares like Bata, Reliance, SBI, GNFC and others.

"What the government has done is quite good," a broker at Prudential Bache Securities said. "These measures pump more liquidity into the system and stabilise interest rates at a low level." Tokyo shares maintained strong gains in afternoon trade as public and corporate pension funds covered short positions built up over recent weeks, traders and analysts said.

As of 0536 GMT, the benchmark Nikkei average had risen 534.31 points or 3.80 per cent to 14,576.92. Nikkei September futures rose 580 to 14,590. "The market's focus has shifted from fundamental concerns to technical issues," said Paul Migliorato, senior salesman at Jardine FlemingSecurities.

Analysts said the movement may also represent a re-thinking in the Tokyo market, which has suffered as Asia spiralled into crisis and New York stocks tumbled. The dollar fell more than two yen from an early high trade at 132.55 yen by mid-morning in Tokyo, as US hedge funds unwound yen short positions to make up for losses incurred in the US stock market and emerging markets, dealers said.

At 0638 GMT, the dollar stood at 131.83/93 yen compared with 133.51/61 yen in late New York on Friday, when Federal Reserve chairman Alan Greenspan said the US central bank was now as inclined to cut interest rates as to raise them.

Senior finance ministry official Eisuke Sakakibara told reporters that Japan and the United States are both concerned about "excessive" yen weakness. "I think the correction of the yen's weakness has just begun," Sakakibara, the vice-finance minister for international affairs, said as he entered the ministry of finance.

In Seoul, the yen's strength helped boost buying inbluechips such as Samsung Electronics, brokers said. The Korea Stock Exchange composite index rose 3.92 per cent to 328.22.

The rise in Tokyo stocks combined with strong resources stocks and hopes of a US interest rate cut to push the Australian share market higher. The leading index had gained 2.35 per cent to reach 2562.9 by 0540 GMT. "The (Australian) dollar is holding quite well, Tokyo's up this morning, futures are very strong, bonds are strong and there are quite a few (takeover) rumours around," said dealer Peter Struk of Reynolds & Co.

Kuala Lumpur shares extended massive gains in early trading on buying by local funds and retail players, dealers said. At 0524 GMT, the benchmark 100-stock Composite Index was up 92.85 points, or 25.55 per cent, to 456.29.

"Local funds are under instruction to push up the market," said a senior analyst at a local brokerage.

Thai shares were 3.55 per cent up at 214.67 points by 0550GMT, pulled up by active trade on the back sharp rises in most regional markets --after a week that saw the market hit new 11-year lows every day. Singapore bluechips were boosted by the start of futures trading based on the Morgan Stanley Capital International (MSCI) Singapore index. The key Straits Times Industrials Index (STI) soared 5.86 per cent, or 47.15 points, to 852.19, at the midday break.