Shares in Tokyo also got a boost from a report that China's investment agency was considering investing in Japanese stocks.

In China, however, the benchmark Shanghai Composite Index fell to a three-month low, hurt by losses in index heavyweight PetroChina.

The rebound across most Asian markets came after steep declines in recent weeks amid jitters that a housing slump and credit crisis would drag on the U.S. economy, a key export market.

But better-than-expected sales figures over the weekend, the traditional start to the Christmas shopping season, showed that American consumers spent more than last year. Sales on Friday and Saturday combined rose 7.2 percent to $16.4 billion from the same two-day period a year ago, according to ShopperTrak, which tracks total sales at more than 50,000 U.S. retail outlets.

Japan's Nikkei 225 average rose 246.44 points, or 1.66 percent, to finish at 15,135.21 points. Hong Kong's Hang Seng index was surged 1,085.53 points, or 4.09 percent, to close at 27,626.62.

In Seoul, the Korea Composite Stock Price Index jumped 4.7 percent, while markets in Singapore and Australia both rose more than 2 percent.

"The market is really oversold given last week's plunge," said Astro del Castillo, a managing director at First Grade Holdings in Manila, where the Philippine Stock Exchange Index gained 1.2 percent to 3,537.29, recouping some last week's 2.9 percent loss.

But in China — where stocks had surged to record highs in October — the benchmark Shanghai Composite Index lost 1.5 percent to 4,958.85, its lowest close since Aug. 21.

PetroChina, the biggest company traded in China by market capitalization, fell 2.4 percent to 33.76 yuan, extending last week's 11 percent drop.

Japanese stocks, meanwhile, were supported from a report The Nikkei, Japan's biggest financial daily, that said that China's new investment agency might invest some of its $1.4 trillion in foreign reserves in Japanese stocks. The report cited an unnamed Chinese official and did not give a timeline. Some investors didn't find the report surprising, traders said.

Sony and Sharp led the advance in Tokyo as a slight weakening in the yen against the dollar — which helps exporters — also encouraged investors. The dollar rose to 108.50 yen midafternoon, up from 108.18 yen late Friday in New York.

Sony Corp. jumped 4.6 percent, while Sharp Corp. gained 5.4 percent and Nintendo Co. ended up 4.2 percent.

Investors were also heartened by a gain Friday on Wall Street, where the Dow Jones industrial average rose 181.84 point, or 1.42 percent, to 12,980.88 in a shortened holiday session.

Adding to the positive sentiment in Hong Kong were comments by tycoon Lee Shau-kee, chairman of property developer Henderson Land. He was reported Friday as saying he expects the benchmark index to rebound to 30,000 points by the end of this year. Lee said he had set aside 10 billion Hong Kong dollars ($1.2 billion) to buy stocks.

Heavyweight China Mobile rose 4.1 percent, while oil company Sinopec climbed 9.5 percent