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Asian stock markets rise as oil prices fall

HONG KONG - Asian stock markets resumed their upswing Wednesday, as another fall in oil prices and a strong performance on Wall Street boosted investor confidence throughout the region.

The Nikkei 225 index in Tokyo gained almost 1 percent to close at 13,312.93. Hong Kong's blue-chip Hang Seng Index rose nearly 2.7 percent to 23,134.55.

Elsewhere, markets in Australia and South Korea gained around 2 percent, while exchanges in Taiwan and Singapore were each up more than 3 percent. In India, the Sensex benchmark soared 5.9 percent - a day after a tight confidence vote in favor of the government ended weeks of political uncertainty.

The gains came despite ongoing wies about the toll of America's slumping housing market and the credit crisis on financial firms.

While disappointing results from Wachovia Corp., Washington Mutual and American Express Co., added to those fears, Asian traders focused more on the good news of easing oil prices. Crude futures lost more than US$3 overnight and continued dropping in electronic trade to bring oil's decline since July 11 to more than US$20 a barrel.

Wall Street rallied on the lower oil prices, with the Dow closing almost 1.2 percent higher at 11,602.50 points. Although Asian stocks could move higher in coming days, analysts weren't ready to declare an end to the region's bearish trend.

“The overall U.S. economy is still weak, but the funds will dikely ke%Ð'flowing to the region's market in the short term," said Castor Pang, an analyst at Sun Hung Kai Financial in Hong Kong. “If there's any bad news, especially about earnings in the U.S., hat could hurt the rebound."

Late afternoon in Singapore, light, sweet crude for September delivery was trading around US$126 a barrel in electronic trading on the New York Mercantile Exchange.

In Hong Kong, the sinking oil prices translated into hefty gains for refiners and airlines.

China Petroleum & Chemical Corp. - also known as Sinopec, Asia's biggest refiner by volume - shot up 5.3 percent. Airliner China Southern surged 9.9 percent, and Cathay Pacific gained 6.3 percent.

Banks also got a boost, with HSBC and Chinese institutions such as ICBC, the country's largest lender, gaining around 3 percent or more.

Japanese investors also bought financial shares as worries over the U.S. financial sector faded for the time being.

Banking giant Mizuho Financial Group Inc. jumped 4.29 percent. Nomura Holdings Inc., Japan's largest securities business group, rose 2.59 percent.

Export-linked stocks gained on a weakening yen, which makes Japanese goods price competitive abroad and increases the value of repatriated profits by local exporters.

Matsushita Electrical Industrial Co., which sells products under its Panasonic brand, rose 2.76, while electronics maker Hitachi Ltd. added 1.70 percent. Sony Corp. was unchanged.

Indian investors, meanwhile, were relieved after the confidence vote ended speculation over an early election and allowed Prime Minister Manmohan Sigh to turn the page on political squabbling that had stalled government action.

The country's finance minister said the government would now push ahead with unfinished economic reforms that would include drafting new legislation in insurance and banking sectors and creating a pension regulatory body, local media reported.

Mainland China stocks fared worse, with the benchmark Shanghai Composite Index edging 0.3 percent lower to close at 2,837.8.

Real estate firms led the decline. The country's biggest developer, China Vanke Ltd., fell 1.36 percent. Poly Real Estate Group dropped 1.54 percent.

In currencies, the dollar stood at 107.26 yen midafternoon in Tokyo, little changed from overnight in New York but up from 106.50 yen in Asian trading hours Tuesday. The euro stood at US$1.5786, compared with US$1.5784 in New York.