Asian markets closed higher across the board Friday, having got a lift from technology stocks and year-end program buying by funds. Most of the major indexes finished over 1 percent higher, while the Hang Seng gained 2.3 percent.
But anxiety over the credit crisis still lingers. The latest turn of events -- the Wall Street Journal reports that Merrill Lynch looks set to get $5 billion capital infusion from Singapore's Temasek Holdings. This coupled with Thursday's news of Bear Stearns' first ever quarterly loss, is keeping investors on their toes.
And with many investors taking off for the holidays, reluctant to take new positions as the credit crisis plays out, the U.S. dollar traded at around a two-month high against the euro and near a six-week high against the yen .
Japan's Nikkei 225 Average finished up 1.5 percent as investors snapped up TDK Corp and other recently battered high-tech shares following gains in their U.S. peers. Hitachi rose after the Nikkei business daily said the firm plans to sell a minority stake in its struggling hard disk drive business to U.S. investment fund Silver Lake.
South Korea's KOSPI gained 1.8 percent as hopes that South Korea's president-elect would speed up sales of state-run assets boosted firms such as Daewoo Shipbuilding, while banks rallied on deregulation expectations. Daewoo Shipbuilding jumped over 9 percent as investors increasingly bet the shipbuilder would come to the market early next year under president-elect Lee Myung-bak's pledge to push for privatisation of state-controlled assets.
Australian shares finished 1.1 percent higher, recovering from their longest losing streak in five years set the previous day as some investors picked up bargains in recently battered banking stocks. Australia and New Zealand Banking Group and Westpac Banking both ended higher.
Hong Kong stocks made firm gains of 2.3 percent as stabilizing global equity markets lifted investor confidence, with local property developers such as Cheung Kong, outperforming after the city reported strong inflation data. Investors, brushed off China's interest rate rise, which at 18 basis points was lower than some had expected.
Singapore's Straits Times Index was 1.2 percent higher on year-end program buying with blue chips uniformly rising .
China's Shanghai Composite Index also ended 1.2 percent higher. Chinese stocks, including banks, stayed firm as the market continued to rebound despite an earlier-than-expected interest rate hike announced after the close on Thursday. Property shares underperformed.