Asian markets rallied for a third day yesterday to wrap up a tumultous week as investors took heart from Wall's Street's gains overnight and positive US jobs figures.
Investors welcomed details of a tax rebate for American consumers announced as part of US President George W. Bush's economic stimulus plan. The tax rebate will put US$600 to US$1,200 in most taxpayers' pockets.
"The markets are reacting to news that Bush and Congress have agree to accelerate tax rebates for US consumers so they can go out and buy more exports from Asia," said Francis Lun, a general manager at Fulbright Securities in Hong Kong.
European markets also rose in early trading, and US stock index futures suggested that Wall Street would also advance. Dow Jones industrial average futures were up 56 points, or 0.45 percent, to 12,421, while NASDAQ Composite Index futures were up 19.50 points, or 1.1 percent, to 1,856.5.
Markets across Asia turned in robust gains, with stocks in Tokyo and Hong Kong nearly erasing steep losses suffered earlier this week.
Japan's benchmark Nikkei 225 average surged 536.38 points, or 4.10 percent, to close at 13,629.16, while Hong Kong's Hang Seng Index jumped 6.7 percent to 25,122.37 points.
India's benchmark Sensex rose 6.8 percent, while markets in Australia, South Korea and the Philippines also put in healthy advances. China's Shanghai benchmark index rose 1 percent.
Asian markets plunged on Monday and Tuesday on worries about a slowdown in the US, a key export market and the world's biggest economy.
They rebounded after the US Federal Reserve slashed interest rates by three-quarters of a point on Tuesday, a move that also restored some investor confidence on Wall Street.
For the week, Hong Kong's market -- which tumbled a combined 13.7 percent on Monday and Tuesday -- dipped just 0.3 percent, while the Nikkei fell 1.7 percent.
In early European trading yesterday, the UK's FTSE 100 added 0.3 percent, Germany's DAX gained 1.6 percent to 6,931.18 and France's CAC 40 climbed 1 percent.
Investors were cheered by gains on Thursday on Wall Street, where the Dow Jones industrials rose for a second day after the US Department of Labor said the number of people seeking unemployment benefits last week fell for a fourth straight week.
But traders are searching for clues about the US economy in hopes of determining whether it will soon pick up or perhaps slow and tip into recession.
A recovery in the dollar against the yen yesterday helped lift Japanese exporters' stocks, with Toyota Motor Corp jumping 6.3 percent, Honda Motor Co rising 6.5 percent and Sony Corp climbing 2.4 percent. The dollar was trading at ¥107.57, up from ¥106.79 late Thursday in New York.
Japanese Economy Minister Hiroko Ota told a parliamentary committee yesterday that the "direct impact of the US subprime loan problem on Japan has been limited." But she added weak share prices could dampen consumer appetite.
Hong Kong property stocks like Sun Hun Kai Properties led the market on expectations that the Fed would again slash rates when it meets on Tuesday and Wednesday. Hong Kong banks usually match US rate cuts as the Hong Kong dollar is pegged to the greenback.
The Dow Jones industrial average rose 0.88 percent to 12,378.61 on Thursday, following a 2.5 percent surge on Wednesday.