* Crude rises $1 on Gustav threat to Gulf of Mexico
* U.S. dollar set for biggest monthly rise since Jan 1997
* Nikkei jumps 2.4 pct after solid U.S. GDP revision
(Updates prices, adds European outlook)
By Kevin Plumberg
HONG KONG, Aug 29 (Reuters) - Asian stocks climbed on
Friday, led by industrial companies and exporters, after a big
upward revision to second-quarter U.S. economic growth boosted
the outlook for demand, but shares posted their fourth
consecutive monthly decline.
European shares <> <> <> opened flat to a
touch higher, with investors' focus on a rise in first-half
profit from the world's second-biggest retailer Carrefour
<CARR.PA> and U.S. personal consumption data for July due
later.
The U.S. dollar slipped as oil prices climbed $1 in
anticipation of Tropical Storm Gustav hitting the Gulf of
Mexico, home to a quarter of U.S. oil production. Crude tumbled
more than $2 overnight after the U.S. government promised to
tap emergency stockpiles if needed.
Data overnight underscored the extent to which the U.S.
economy -- the origin of the credit crisis plaguing the global
financial system -- has outperformed Europe and Japan since
March. This supported the U.S. dollar in August, setting it on
track for its largest monthly rise against the euro since
January 1997.
"Worries about the credit crunch still exist and sentiment
remains weak, but much of the concern has probably already been
reflected in the losses we've seen this month," said Kim
Seong-bong, a market analyst at Samsung Securities in Seoul.
Japan's Nikkei share average <> finished 2.4 percent
higher, lifted by Honda Motor Co <7267.T> and Canon Inc
<7751.T>.
Outside Japan, stocks in Asia-Pacific <.MIAPJ0000PUS> were
up 1 percent, according to an MSCI index, which has remained in
a very narrow trading range for the last two weeks because of a
summer lull in trading volume.
The index was down about 6.4 percent in August, having
risen for only two out of the last 10 months.
South Korea's KOSPI index <> underperformed the
region, rising 0.4 percent, with shares of the world's
fourth-largest steelmaker POSCO <005490.KS> providing the
biggest boost.
Analysts said weakness in Korea's won, the poorest
performing Asian currency so far in 2008, has weighed on the
share market in recent weeks.
The won has weakened 7 percent against the U.S. dollar in
August. This is arguably good for exporters but increases
import costs for local industries such as steelmaking and
shipbuilding, which make up a significant share of the
country's equity market.
CHINA DIALS DOWN RISK
Hong Kong's Hang Seng index <> climbed 1.9 percent, but
was still struggling to move up from a 1-year low hit last
week.
China's Shanghai composite index <> rallied 2.9
percent but was still down 13 percent in August.
Fund managers in China have become unwilling to allow risk
into their portfolios, with the Shanghai market the worst
performing major equity market in the world so far this year.
Chinese mutual funds have sharply raised their recommended
allocations for fixed income and cut allocations to equities
because of a slowing economy, the latest monthly Reuters poll
of fund managers showed.
On average, the funds raised their suggested allocation to
bills and bonds within a balanced portfolio to 18.5 percent,
the highest level since the poll was launched in mid-2007, from
13.125 percent a month ago. []
The euro <EUR=> edged 0.2 percent higher against the U.S.
dollar at $1.4732 ahead of a U.S. holiday weekend. Some
analysts said the modest dollar weakness may be due to an
article in the UK's Daily Telegraph newspaper that said Russia
may cut oil shipments to Western Europe in retaliation for the
European Union's threat of sanctions.
"A three-day weekend is coming up and some players are
opting to shed long positions on the dollar with geopolitical
risks in the air," said Joseph Kraft, head of Japan capital
markets at Dresdner Kleinwort in Tokyo.
Although the euro has rebounded from a six-month low of
$1.4570 hit on Tuesday, it has suffered a steep 5.5 percent
decline in August after a series of weak economic data changed
expectations for a European Central Bank interest rate rise
this year.
The dollar slipped 0.3 percent against the yen <JPY=> to
109.05 yen, down from a 7-month high around 110.66 yen set two
weeks ago.
October U.S. light crude futures rose $1.07 to $116.66 a
barrel <CLc1>, butting up against a trendline that extended
down from oil's all-time high of $147.27 a barrel hit on July
11.
Tropical Storm Gustav has killed 68 people in the Caribbean
and was on a path to reach New Orleans and the Gulf of Mexico
oil fields as possibly the most powerful blow since the 2005
hurricane season.
Gold prices, which have traded in lock-step with crude for
the last several weeks, rose 0.1 percent in the spot market
<XAU=> to around $831 an ounce, continuing to recover from a
2008 low of $773.90.
(Additional reporting by Park Jung-youn in SEOUL and Shinichi
Saoshiro in TOKYO, editing by Dhara Ranasinghe)
