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Updated from 4:13 a.m. EST



) -- Asian stocks ended mostly higher Monday as investors took a rate increase from the U.S.

Federal Reserve

last week as a sign the world's No. 1 economy might be doing a bit better.

In Tokyo, the Nikkei 225 stock average gained 2.7% to 10,400.47, while in Hong Kong the Hang Seng index rose 2.4%.

Stocks fell in China on Monday by 0.5% as investors are still digesting a move by regulators to increase reserve requirements for banks as a way to curb lending. Markets in China were closed all of last week for the Lunar New Year celebration.

The Fed's increase Thursday in the discount rate was initially viewed by overseas investors as a potential catalyst to a slowing of the recovery in the U.S. But a favorable report Friday on the Consumer Price Index -- the core rate, which strips out food and energy costs, showed a decline of 0.1% -- took the edge off concerns of imminent tightening.

On Friday, the

Dow Jones Industrial Average

TheStreet Recommends

rose 0.1%, the

S&P 500

gained 0.2% and the


ticked higher by 0.1%.

Premarket futures suggest U.S. stocks will open higher in the U.S. on Monday.

European shares were mixed, with stocks in London higher by 0.1%.

-- Reported by Joseph Woelfel in New York.

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