Asian stock markets extend gains amid renewed faith in global recovery; Europe little changed

Asia stocks up amid faith in recovery; Europe flat

HONG KONG — Asian stock markets and oil prices extended their advance Wednesday amid renewed faith a recovery in the global economy was sustainable. European shares were little changed.

Major benchmarks in Asia were about 1 percent higher or more, while the dollar continued its downward spiral against the yen and euro.

Investors poured money into riskier assets like stocks and commodities throughout the region, as Tuesday’s news that Australia was the first major country to raise interest rates since the onset of the financial crisis continued to bolster confidence in the world economy. It was a signal that policymakers believe the country’s economy is strong enough to withstand higher borrowing costs, and fueled optimism that other economies were in better than shape than expected.

“It provided a psychological boost to the market as a seal of approval on the global recovery story,” Dariusz Kowalczyk, chief Investment strategist for SJS Markets in Hong Kong, wrote in a note.

At the same time, he said Australia’s decision was somewhat surprising coming just weeks after the leaders of the Group of 20 major countries agreed to continue with government spending programs and low interest rates to nurture a global rebound.

While no developed country would follow in Australia’s footsteps anytime soon, South Korea, where the economy has held up relatively well and the central bank has already said it might raise rates in response to rising asset prices, could be next, he said. The Bank of Korea next reviews interest rates Friday.

In Europe, Britain’s FTSE 100 was flat, Germany’s DAX added 0.1 percent and France’s CAC-40 inched up 0.1 percent.

Stock futures pointed to more gains Wednesday on Wall Street. Dow futures were up 24, or 0.3 percent, at 9,678.

In Asia, Japan’s Nikkei 225 stock average gained 107.80 points, or 1.1 percent, to 9,799.60, and Hong Kong’s Hang Seng advanced 430.06 points, or 2.1 percent, to 21,241.59.

Australia’s index jumped 2.3 percent and Singapore’s index gained 0.9 percent. Taiwan’s benchmark was up 1 percent. South Korea’s market closed flat. Mainland China markets are closed for a weeklong holiday and reopen Friday.

In the U.S. overnight, the Dow rose 131.50, or 1.4 percent, to 9,731.25 after rising 112 points Monday.

The Standard & Poor’s 500 index rose 14.26, or 1.4 percent, to 1,054.72, while the Nasdaq composite index rose 35.42, or 1.7 percent, to 2,103.57.

Oil prices were higher, helped by the weak dollar and optimism that a global economic recovery would boost demand for crude. Benchmark crude for November delivery was changing hands at $71.31 in Asia, up 44 cents from the prior session. The contract rose 47 cents overnight.

The dollar tumbled to 88.13 yen from 88.76 yen. The euro traded at $1.4721 from $1.4722.