Il Nuovo Postiglione - Stocks rise as China eases more Covid measures

The moves helped offset a forecast-busting US jobs report that dented hopes that the Federal Reserve will take a softer approach to hiking interest rates in its battle against inflation.

Investor sentiment has picked up considerably in recent weeks on indications the US central bank will slow down its monetary tightening as price rises appear to be slowing and the economy weakens.

That has come as Chinese leaders take a more pragmatic approach to fighting Covid after recent protests across the country that also called for more political freedoms.

The harsh zero-Covid strategy -- which saw major cities including Shanghai locked down for months -- has been blamed for a sharp slowdown in economic growth this year and sent shudders through markets.

The move to reopening helped fuel "market optimism about the tailwinds of a likely acceleration in growth in 2023 for China-sensitive assets", said SPI Asset Management's Stephen Innes.

"Although there have been several local changes to Covid policies, China has yet to shift away from the zero-Covid policy officially. Instead, they are trying to balance the expected reopening surge in Omicron cases against minimising economic and social costs."

The brighter outlook lifted Asian markets with Hong Kong leading the way, jumping more than four percent while Shanghai put on more than one percent.

There were also gains in Tokyo, Sydney, Wellington, Singapore, Taipei and Manila.

London opened marginally higher, though Paris and Frankfurt inched down.

The prospect of the world's number-two economy kicking back into gear helped traders overcome data on Friday showing far more jobs than expected were created in the United States in November.

A big jump in wages added to concerns that the economy remained hot, meaning the Fed still had plenty of work to do to get inflation down to its two percent target.

"If next week's consumer price index data stays hot... then our forecast for the Fed funds rate to be raised by 50 basis points each in December and February to hit 4.75-5.00 percent may prove too low," said Mansoor Mohi-uddin, of Bank of Singapore.

"If the Fed instead needs to keep hiking well into 2023 then the near-term outlook for risk assets will remain challenging for investors."

Still, the dollar remained under pressure against its main peers as investors lower their expectations for US borrowing costs.

China's yuan was among the best performers, breaking below the seven per dollar level for the first time in almost three months.

The reopening of China also lifted oil prices as demand expectations improved, while a decision by OPEC and top producers to not lift output also boosted the commodity.

Still, Innes added: "One major obstacle to prompt oil prices is that a widespread official reopening is unlikely to occur until spring. So, demand could remain exceptionally soft, including in the initial stages of a broader reopening of the economy."

- Key figures around 0820 GMT -

Tokyo - Nikkei 225: UP 0.2 percent at 27,820.40 (close)

Hong Kong - Hang Seng Index: UP 4.5 percent at 19,518.29 (close)

Shanghai - Composite: UP 1.8 percent at 3,211.81 (close)

London - FTSE 100: FLAT at 7,556.74

Euro/dollar: UP at $1.0545 from $1.0531 on Friday

Dollar/yen: UP at 134.90 yen from 134.27 yen

Pound/dollar: UP at $1.2300 from $1.2296

Euro/pound: UP at 85.79 pence from 85.73 pence

West Texas Intermediate: UP 0.7 percent at $80.50 per barrel

Brent North Sea crude: UP 0.6 percent at $86.04 per barrel

New York - Dow: UP 0.1 percent at 34,429.88 (close)

S.Abato--INP