×

Asia Climbs on US Stimulus Hopes

Asian markets climbed Thursday while the greenback gained as investors took heart from the U.S. House of Representatives, making headway on a $825 billion stimulus spending package and other efforts to stem the financial crisis.

The U.S. House of Representatives passed an $825 billion stimulus plan in President Barack Obama's first legislative achievement since taking office last week, with the debate now shifting to the Senate. The move came as U.S. policymakers have begun talking more openly about creating a bad bank to warehouse the toxic mortgage-related assets still tainting the balance sheets of major financial institutions.

Activity was limited with some countries still on holiday for Lunar New Year. Financial markets in Hong Kong reopened after a three-day break, but markets in China and Taiwan remained closed.

The euro weakened against the dollar, while the greenback was steady against the yen. The New Zealand dollar dropped after the country's central bank slashed rates by 1.5 percentage points to a record low 3.5 percent and left the door open to more cuts to counter a deep recession. Crude oil futures fell below $42 a barrel in the Asian session.

Japan's Nikkei 225 Average climbed 1.8 percent after Sumitomo Mitsui Financial Group and other banks surged amid hopes for a U.S. bank rescue plan, but the yen's advance on the dollar capped gains. Nippon Steel, the world's No. 2 steelmaker, was flat after cutting its profit outlook for this year by a bigger than expected 35.7 percent, hit by a slump in car sales.

Seoul shares finished higher after the U.S. House's passage of economic stimulus measures boosted financials, but gains were limited by losses in telcos and after big rises in the previous session.

Australian shares rose 0.9 percent as financial stocks gained on hopes that the Obama administration's plan to stimulate U.S. economy would ease the logjam in credit markets and revive global growth. However, fund managers said broader market sentiment was still fragile, with investors wary of falling company profits and the possibility that companies may need to raise more capital to pay off debt. The poor sentiment made it difficult to say when a sustained recovery would take place.

More From CNBC.com

Hong Kong shares were up 4.6 percent as small dealers kept the momentum up in financials on hopes the U.S. Congress-approved $825 billion stimulus package would help avert a deeper recession. Index heavyweight and Europe's biggest lender HSBC rallied 9 percent, largely fueling the Hang Seng's advance. Other blue chip financials rose, with sentiment buoyed by the U.S. government's plan to create a government "bad bank" to absorb toxic assets

Singapore's Straits Times Index closed flat. DBS Group gained almost 1.2 percent after announcing that it's CEO Richard Stanley, who was hired in May last year, is suffering from cancer. Koh Boon Hwee, the bank's chairman, will assume an "active management oversight role" during the absence of Stanley, who is taking three to six months of medical leave, the bank said in a statement. The bank reports its fourth-quarter results on Feb 13.