*

Asia stocks hover near highest since February 2021

*

Dollar firms after hawkish tilt from some Fed policymakers

*

Earnings focus now to be on tech firms

*

Japan closes for holiday, trading in Asia likely to be

muted

(Updates to Asia afternoon)

By Ankur Banerjee

SINGAPORE, Nov 3 (Reuters) - Asian stocks rose on Monday

as the U.S.-China trade truce and surging investment in

artificial intelligence buoyed risk sentiment, while the dollar

firmed to a three-month high on easing rate cut wagers after

hawkish comments from policymakers.

Investors are still focused on developments from last week,

including central bank meetings and the U.S.-China agreement on

a year-long trade truce that was within broad expectations. But

doubts remain if the truce will last for the full duration.

MSCI's broadest index of Asia-Pacific shares outside Japan

was up 0.63% at 729.82, hovering near the

4-1/2-year high it touched last week. The index is up more than

27% this year, on course for its best year since 2017.

Nasdaq futures rose 0.25%, while European futures

also pointed to a higher open ahead of manufacturing

data from the region.

In Asia, data showed big manufacturing hubs struggled to

fire up in October as weak U.S. demand and tariffs under

President Donald Trump hit factory orders across the region.

Japan markets were closed for a holiday on Monday.

South Korea's Kospi surged more than 2% to yet

another record peak. China's blue-chip stocks were

0.1% higher and Hong Kong's Hang Seng Index rose 1%.

"We advise investors to lock in some gains on the rises and

accumulate on the corrections, and rotate into more defensive

positioning toward year end," said BofA strategists, noting that

optimism tied to the U.S.-China trade truce has been priced in.

HAWKISH FEDSPEAK

A clutch of Federal Reserve bank presidents on Friday aired

their discomfort with the U.S. central bank's decision to cut

interest rates, even as influential Fed Governor Christopher

Waller made the case for more policy easing to shore up a

weakening labour market.

Following the October monetary policy meeting last week, Fed

Chair Jerome Powell said an interest rate cut at the next

meeting in December was "not a foregone conclusion". Investors

had expected that move to be almost a done deal.

"We continue to think that the motivation for the rate cuts

is consistent with our premise for further dollar downside: the

U.S. economy will not outperform to the same degree as it did

before," Goldman Sachs strategists said in a note.

"That will lead to a weaker dollar over time given its

strong starting point."

Traders are now pricing a 68% chance of a rate cut in

December, down from a near certainty last week before the Fed

meeting, where the central bank lowered rates by 25 basis points

as expected.

That has left the dollar firmer. The euro last bought

$1.1524 at a three-month low. Sterling eased 0.2% to

$1.3142, while the yen was at 154.05 per U.S. dollar,

near its lowest since mid-February.

With the U.S. government shutdown set to extend this week,

there will be no data for job openings as well as non-farm

payrolls. The spotlight instead will be on a private employment

report from ADP later this week.

The U.S. shutdown, which started on October 1, is now the

second-longest ever behind the 2018-2019 shutdown that lasted 35

days.

EARNINGS SEASON IN FOCUS

After a mixed bag of earnings from the megacap companies

that showed investors were keen to see a return on the extensive

capital spending on AI infrastructure, focus will be on tech

firms reporting this week.

Enthusiasm over AI has helped drive global stock markets,

but investors are wary of potential overexuberance tied to the

theme and eager for evidence that AI investments are paying off.

Semiconductor firms Advanced Micro Devices ( AMD ), Qualcomm ( QCOM )

and data analytics company Palantir Technologies ( PLTR )

are due to report. Other companies set to report this

week include McDonald's and Uber ( UBER ).

In commodities, gold was back above $4,000 as traders

bought the dip.

Brent crude futures rose 0.32% to $64.98 a barrel,

while U.S. West Texas Intermediate crude was at $61.16 a

barrel, up 0.28%, after OPEC+ decided to hold off hiking

production in the first quarter of next year.