Asian stocks extended the rally that sent global equities to their biggest gain in 3 1/2 years as Japanese shares and materials companies climbed.

The MSCI Asia Pacific Index added 0.5 percent to 119.07 as of 9:02 a.m. in Tokyo, with materials and health-care shares leading the advance. Japan’s Topix index climbed 1.1 percent as markets across the region extended gains that began after European Central Bank President Mario Draghi signaled it may boost economic support. Bank of Japan Governor Haruhiko Kuroda, who decides on policy on Jan. 29, played down the impact of recent market gyrations on his economy, while traders are predicting the Federal Reserve will hold interest rates when it also meets this week.

A measure of volatility on the MSCI Pacific Gauge climbed to the highest since September last week, while the Shanghai Composite Index swung between gains and losses every trading day. Japan’s Topix surged 5.6 percent on Friday after losing 6.4 percent the previous two days.

The MSCI Asia Pacific Index is still down 9.7 percent this year, while the Shanghai Composite Index has tumbled 18 percent as investors retreat from riskier assets on concerns about China’s economic slowdown and a rout in oil and other commodities.

South Korea’s Kospi index added 0.4 percent on Monday. New Zealand’s benchmark gauge rose 0.7 percent and Australia’s S&P/ASX 200 Index increased 1.1 percent. Markets in China and Hong Kong have yet to start trading. Futures on the Hang Seng and Hang Seng China Enterprises indexes gained 1.3 percent in most recent trading, while contracts on the FTSE China A50 Index futures rose 1.2 percent.

Chinese stocks rallied on Friday as energy producers surged on higher oil prices and after the government signaled it will curb overcapacity in industries such as coal that have been dragging down economic growth. The Shanghai Composite Index rose 1.3 percent, while the Hang Seng China Enterprises Index climbed 3.4 percent.

Futures on the Standard & Poor’s 500 Index slid 0.1 percent on Monday. The U.S. equity benchmark index advanced 2 percent Friday, the most since Dec. 4, while the MSCI All-Country World Index posted its best day since June 2012.

Energy shares advanced in Asia as oil fluctuated near $32 a barrel following the biggest two-day rally in more than seven years.

Source: Bloomberg