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Asian Markets Close Firmly Higher, Expecting U.S. Rally

Asian markets made solid gains Friday, ending the week firmly in positive territory as investors bet on a positive reaction to Fed Chairman Ben Bernanke's speech on monetary policy and housing in Jackson Hole, Wyo. at 11 am Singapore time.

Financial markets are expecting the central bank to cut interest rates by at least a quarter percentage point at its Sept. 18 meeting.

Technology stocks were in the lead for a second day running after Dell , the world's second-largest personal computer maker, beat expectations with a 46% rise in its quarterly profits. Japanese electronics components maker TDK, Sony, South Korea's Samsung Electronics and flat screen maker LG.Philips LCD all
climbed.

Tokyo's Nikkei 225 Average closed 2.6% higher on last minute buying spurred by news that Bush would outline reforms aimed at helping homeowners with subprime mortgages avoid default. Merger hopes lifted paper stocks after the news report that
Rengo would integrate its cardboard production with that of Japan's second-biggest paper maker, Nippon Paper Group.

A man uses his mobile phone in front of electronic stock boards at the Australian Securities Exchange (ASX Ltd.) headquarters in Sydney, Australia.
Ian Waldie | Bloomberg | Getty Images
A man uses his mobile phone in front of electronic stock boards at the Australian Securities Exchange (ASX Ltd.) headquarters in Sydney, Australia.

South Korea's KOSPI rose 1.7% to a three-week closing high, led by technology shares such as LG Electronics on hopes for improving earnings, but logged a 3% fall for August amid fears about credit turmoil.

Australia's S&P/ASX 200 Index rose 1.8% to a five-week closing higher as top miner BHP Billiton gained on firmer metal prices, while retailer Harvey Norman jumped on upbeat earnings.

Hong Kong's Hang Seng Index set a new record, rising 2.1%, in step with other Asian markets, as hopes of a U.S. rate cut buoyed shares in the city's developers while investors seeking quality names sent China Mobile and China Construction Bank to new highs. Hong Kong-listed shares in mainland enterprises, or H shares, jumped to an all-time high, supported by gains in Chinese lenders.

Singapore's Straits Times Index was 2% higher with blue chips such as NOL and Sembcorp Industries taking the lead.

China's Shanghai Composite Index closed 1% higher as airlines resumed soaring on the back of strong earnings and expansion plans, while banks were weak.