Asia shares rise on China frenzy, oil climbs

SINGAPORE, May 22 (Reuters) Most Asian shares rose on Tuesday, led by Chinese stocks at record highs, while exporters such as Sony were spurred by a stronger dollar and oil producers were lifted by the jump in Brent crude to above $70.

The dollar stood near a five-week high against the euro and a three-month peak versus the yen, as robust U.S. economic data eased speculation the Federal Reserve might cut interest rates later this year.

London Brent crude rose 4 cents to $70.53 a barrel after jumping to a nine-month high of $70.83 overnight, as Nigerian unrests kept the markets worried about supply disruptions just ahead of the U.S. summer driving season.

The Nikkei average <.n225> gained 0.6 percent, led by a near 3 percent jump in Sony Corp. and a 4.7 percent surge in Sumitomo Mitsui Financial Group Inc. after the banking group forecast a rebound in profits for this year.

But a bigger-than-expected drop in capital spending for the first quarter seen last week capped gains.

''Capital spending has been propping up the economy,'' said Katsuhiko Kodama, senior strategist at Toyo Securities.

''With those numbers weak, it makes institutional investors reluctant to buy. Investors want to see results from the new fiscal year, at the very least first-quarter earnings.'' Chinese stocks soared 1.5 percent to another all-time high.

Comments by a Chinese central bank adviser that Beijing was unlikely to interfere directly in the domestic stock market, also helped boost confidence, following Friday's tightening measures that failed to douse investors' exuberance.

''This made investors quite confident that the stock market will keep rising steadily,'' said Xu Yinhui, analyst at Guotai Junan Securities, one of the biggest Chinese brokerages.

He said the interest rate hike probably aimed to deter excessive speculation, but not to end the bull run. ''The government wants the market to rise -- that's why the monetary tightening was not too severe.'' Hong Kong stocks <.hsi> were led higher by oil producers such as CNOOC Ltd. , which rose 1.2 percent, while Hong Kong-listed shares in mainland companies <.hsce> slipped.

Seoul shares advanced to another record as chip makers such as Samsung Electronics recovered on news its credit card affiliate Samsung Card will list in the domestic bourse next month. The benchmark index <.ks11> rose 0.54 percent.

Singapore stocks also kept on its record-setting run, led by DBS Group and Singapore Telecommunications , after the city-state posted faster-than-expected first-quarter growth, prompting an upgrade of its full-year economic forecast.

Stronger oil and metals prices boosted Australian resource stocks such as Woodside Petroleum and BHP Billiton , but profit-taking in banks and retailer Woolworths Ltd. pushed down the main index <.axjo>.

News that China Steel would increase steel prices, drove up Taiwan's iron and steel shares, lifting the benchmark index 0.6 percent.

MSCI's measure of Asia Pacific stocks excluding Japan <.msciapj> rose 0.38 percent to another all-time high and Taiwan's stocks <.twii> struck a six-and-half-year high.

RESPITE FOR DOLLAR Latest deal news, including China's $3 billion investment in private equity group Blackstone, helped the Standard & Poor's 500 Index <.spx> rise 0.15 percent to near record highs.

The Nasdaq index <.ixic> gained 0.8 percent, but the Dow Jones average <.dji> shed 0.1 percent, after hitting an intraday record high.

Upbeat U.S. economic data last week offered the dollar a breather from a wave of selling that had pushed it to a record low against the euro last month.

The euro hovered at $1.3454 , after sliding to $1.3436 on electronic trading platform EBS on Monday, its lowest since early April.

The dollar was steady at 121.50 yen , following a climb to a three-month high of 121.63 yen in the previous session. The single currency was at 163.46 yen , after rising to a record high of 163.94 yen on Monday.

U.S. crude held at $66.27 a barrel.

Shanghai copper rose almost 1 percent, after a 5 percent climb in the previous session and gains in London futures overnight.

Spot gold held above $662 an ounce, sustaining New York gains, while a weaker yen sparked buying in Japanese futures.

REUTERS SM VV0947