By Kevin Plumberg HONG KONG (Reuters) - Asian stocks edged up for a fifth straight day on Monday on hopes policy efforts so far to dampen the impact of the financial crisis would ultimately take hold, though data still painted an ugly picture of the global economy. Investors were also cautiously shopping for bargains after shares and commodity prices globally in October posted their biggest decline ever on fears of a deep recession in the world economy. Expectations of more interest rate cuts this week from Australia, Britain and the euro zone following last week's reductions from China, India, Japan and the United States among others has at the least slowed the panicked selling of risky assets that dominated most of October. "It seems that external factors are improving somewhat, particularly in terms of sentiment," said Kim Seung-han, a market analyst at HI Investment & Securities in Seoul. The scramble from equities, commodities and local currency emerging market bonds in October had poured money into yen, U.S. Treasuries and the U.S. dollar, which had its largest monthly in gain in 17 years. These trends were not expected to reverse any time soon, but investors were taking the relative calm in markets to balance their portfolios. The MSCI index of stocks in the Asia-Pacific region outside Japan .MIAPJ0000PUS rose 4.2 percent, up for a fifth consecutive session after having dropped 24.6 percent in October for its biggest monthly decline in the gauge's 20-year history. The benchmark KOSPI in South Korea .KS11 gained 2.5 percent, boosted by details on a $11 billion government fiscal stimulus package that officials said would add a full percentage point to total output. Hong Kong's Hang Seng index .HSI climbed 3.8 percent, led by solid gains in shares of heavyweights like China Mobile (0941.HK: Quote, Profile, Research, Stock Buzz), HSBC (0005.HK: Quote, Profile, Research, Stock Buzz) and ICBC (1398.HK: Quote, Profile, Research, Stock Buzz) that had been hammered in the last month. Japanese markets were closed for a holiday. The parade of rate cuts from Beijing to Washington and massive amounts of U.S. dollar liquidity flooding the financial system have pulled lower lending rates between banks and even improved investor sentiment, despite the strong potential for higher unemployment and softer consumer spending around the world. Growth in Korean exports was at a 13-month low in October, hurt by crimped demand from both developed and emerging markets. The report was the first big Asian economy to report trade data for last month, likely previewing weakness in the region's biggest sore spot because of the global slowdown: exports. Crude prices rose slightly, with dealers taking cues from equities and the U.S. dollar. U.S. light crude for December delivery inched up 38 cents to $68.20 a barrel. Gold in the spot market was trading at $726.75 an ounce, up $2.70 from New York's notional close on Friday, having risen as high as $728.95 an ounce. "It appears the systemic risk that supported gold through the heat of the credit crisis has been alleviated somewhat by the action of the world's central bankers, however, it has not totally vanished," UBS analyst Glyn Lawcock said in a report on Monday. "The risks in the global financial markets are a clear and present danger and subsequently, gold and gold equities will be of interest to a number of investors," he said. The U.S. dollar was slightly higher against the yen but down against the euro, with investors bracing for another round of interest rate cuts this week by the world's major central banks. The dollar was at 99 yen, up from around 98.45 yen late in New York on Friday. The euro was at $1.2832, up from $1.2730 on Friday. U.S. Treasury prices were mostly unchanged, though the benchmark 10-year note rose 4/32, pushing the yield down to 3.96 percent from 3.97 percent on Friday. In the last week, the difference of the 10-year yield over the 2-year yield, also called the yield curve, has increased, especially after the Federal Reserve left the door open for more rate cuts to stabilize the economy. (Additional reporting by Park Jung-youn in SEOUL and James Regan in SYDNEY; Editing by Lincoln Feast)

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