Asian markets were mostly higher for a second consecutive session Wednesday on tentative signs of an improving outlook for the battered global economy, while oil gained ground in anticipation of more production cuts.
Investors got a much needed boost from data showing China's official purchasing managers' index rose, even though it remained below a reading of 50 that divides expansion from contraction. Optimism the U.S. housing market -- at the center of the worst financial crisis since the Great Depression -- may be close to reaching a bottom also helped after data showed a surge in pending sales of previously owned U.S. homes in December.
Data in Australia meanwhile showed retail sales surged in Decemberas government hand-outs, lower borrowing costs and falling petrol prices boosted consumer spending
The U.S. dollar edged slightly higher against the yen. Crude oil prices rose above $41 a barrel in the Asian session, on speculation of further production cuts from OPEC.
Japan's Nikkei 225 Average rose gained 2.7 percent as TDK Corp and other tech shares gained on hopes they may be early winners from an economic upturn,
though concern that such a recovery is distant capped gains. Elpida Memory climbed 6 percent, after saying it may seek government funds under a new scheme aimed at supporting nonfinancial firms hit by the economic crisis, while shippers and construction machinery extended gains on hopes China's economy may start picking up soon.
South Korea's KOSPI added 2.7 percent as U.S. economic stimulus plan hopes boosted sentiment, with Kumho Asiana Group shares rallying on a unit's capital write-down plan and techs gaining on hopes of an industry recovery.
Australian stocks ended 2 percent lower, weighed down by shopping mall owner Westfield Group 12 percent loss, as a string of capital raisings drained cash out of the market. Qantas Airways was on a trading halt after the airline said it plans to raise A$500 million ($322 million) via a share placement. The carrier also announced earnings -- booking a 66 percent fall in first-half profit due to high fuel costs, the weaker currency and falling demand.
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Hong Kong shares gained 2.2 percent as Chinese industrial stocks surged on signs government investment-centered stimulus was helping soften the impact of the global recession. China's Angang Steel shot up over 10 percent at one point amid recovering demand and commodity prices, spurred by the government's 4 trillion yuan ($585 billion) plan, announced last November, to protect growth in its industries. Smaller rival Maanshan Iron & Steel climbed over 7 percent. Other metal stocks also recorded sharp gains with Aluminum Corp of China rallying 7.2 percent.
The Straits Times Index edged 0.3 percent lower. Singapore Airlines shares slipped after the carrier said it will cut fuel surcharges on short and medium haul flights starting Wednesday.
China's Shanghai Composite Index rose in heavy trade, with the SCI climbing above a widely watched technical level, because of further signs that economic growth might be starting to bottom out. China's official purchasing managers' index (PMI) for January roseto 45.3 from 41.2 in December, the China Federation of Logistics and Purchasing said. Its non-manufacturing PMI also rose. This was in line with improvement in brokerage CLSA's unofficial January PMI, which was released on Monday and helped to trigger this week's stock market rally.