Asia stocks climb but down for fourth month

By Kevin Plumberg

HONG KONG (Reuters) - Asia stocks rallied 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 were down for a fourth month.

The U.S. dollar slipped as oil prices climbed $1 as Tropical Storm Gustav with hurricane-force winds headed to the Gulf of Mexico, home to a quarter of U.S. crude 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.

"After their latest sharp losses, shares are set for a modest rebound today, helped especially by rallies in U.S. shares and strong U.S. economic data," said Kim Seong-bong, a market analyst at Samsung Securities in Seoul.

"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."

Japan's Nikkei share average rose 2 percent, lifted by shares of well-known overseas companies like Honda Motor Co and Canon Inc

Outside of Japan, stocks in the Asia-Pacific region were up about 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.