Asian Stocks Gain; Nikkei Closes Up 1.6%

"The fundamentals haven't changed. The economic data has improved but is still very bad. This is a liquidity driven rally," he said. "I'm advising my clients to sell. This isn't a market for long-term investment."

Japan's Nikkei 225 stock average, which has surged 37% since early March, closed higher 1.6% to 9,672.73, while Hong Kong's Hang Seng index finished higher by 3.6%. South Korea's Kospi rose 1.4%.

In China, brokerage CLSA Asia-Pacific Markets said its monthly purchasing managers index rose to 51.2 in May from April's 50.1 on a 100-point scale. Numbers above 50 show an expansion in manufacturing. The state-sanctioned China Federation of Logistics and Purchasing said its own PMI eased slightly to 53.1 from April's 53.5 but still showed activity expanding.

The helped China's Shanghai benchmark surge 3.4%.

The region's commodities stocks benefited from the sign of recovering demand from China as well as surging oil prices.

Japanese oil producer and explorer Inpex rose 1.6%, the world's biggest miner BHP Billiton (BHP Quote) gained 3.1% in Sydney, and Chinese offshore oil producer CNOOC(CEO Quote) vaulted 6.9% in Hong Kong.

On Friday in the U.S., the Dow Jones Industrial Average gained 96.53, or 1.2%, to 8,500.33 and the broader S&P 500 index rose 12.31, or 1.4%, to 919.14.

Stock futures pointed to modest gains Monday on Wall Street.

Stocks in Europe were trading higher. P/>Crude oil prices extended recent gains to rise above $67. Benchmark crude for July delivery was up $1.32 to $67.635 a barrel in electronic trading on the New York Mercantile Exchange.

In currencies, the dollar fell to 94.73 yen from 96.16 yen in late Asian trade Friday. The euro rose to $1.4218 from $1.4030.