Asian Markets Jump on Lower Oil, Wall Street Rally

Asian markets rebounded Monday from a two-year low as the drop in oil prices lifted exporter shares. Both Japan and Australia finished over 1 percent higher.

The U.S. dollar also rose broadly hitting a two-year high against sterling, as tumbling oil and gold prices left investors scurrying to buy back the currency and sparked a rebound in Asian stocks.

U.S. crude futures steadied above $114 a barrel in the Asian, pausing after a 5.4 percent fall in the previous session that had been sparked by a rising U.S. dollar and reports of higher oil supply levels and weakening global demand.

Japan's Nikkei 225 Average closed 1.7 percent higher, its biggest one-day percentage gain in two weeks, with Honda Motor leading the market up after a sharp fall in oil prices temporarily soothed economic fears. Banks also forged higher, with Mitsubishi UFJ Financial Group and other megabanks all gaining more than 4 percent, after U.S. financial stocks rose on hopes that Lehman Brothers may attract a major investor

Seoul shares closed up, with Kookmin Bank rising after plans to transform it into a holding company were approved by shareholders, while Hyundai Motor gained on a weaker won.

Australian shares rose 1.7 percent, led up by the top banks on an easing of financial sector worries in the United States and as lower oil prices soothed growth concerns.

Hong Kong shares rose 3.5 percent, with the entire blue chip index joining a Wall Street-fuelled rally on the local bourse, bouncing back from a sharp selloff on Thursday. A clutch of stocks including Sinopec, Yanzhou Coal, China Construction Bank and ICBC surged after posting forecast-beating or matching first-half earnings. China's second largest lender, China Construction Bank, shot up 3.7 percent after announcing a 71 percent growth in profit, in line with analyst expectations.

Singapore's Straits Times Index was about 0.3 percent higher with SingTel leading the advance after it said it would buy a 60 percent stake in Singapore Computer Systems, triggering a mandatory offer for all the remaining shares.

China's Shanghai Composite Index rose 0.3 percent, led by insurers and Sinopec, after the oil refiner reported better-than-expected quarterly earnings. But turnover remained very thin. China Pacific Insurance surged over 3 percent after reporting a 44 percent jump in first-half net profit. China Life,the biggest insurer, also advanced.