Asian stocks rally following gains onWall Street

August 31, 2011 - 10:10 PM

HONG KONG (AP) — Asian stocks rallied on Thursday following gains on Wall Street that were driven by positive manufacturing data and hopes that the Federal Reserve may to unveil another round of stimulus.

Oil rose above $89 a barrel while the dollar strengthened against the euro and the yen.

Japan's benchmark Nikkei 225 advanced 1.4 percent to 9,080.05 while Hong Kong's Hang Seng jumped 2.1 percent to 20,961.80.

South Korea's Kospi gained 2.2 percent to 1,921.17 and Australia's S&P/ASX 200 rose 1.1 percent to 4,342.20.

Asian stocks took their lead from gains in the U.S. following a surge in factory orders, which investors took as a sign that the manufacturing industry is still healthy. Some investors also believe the Federal Reserve may announce a new round of support for the economy because of worries the U.S. may slide back into recession. Analysts say a weak U.S. jobs report on Friday could push the Fed to act.

"Markets are likely to move into wait and see mode today ahead of tomorrow's U.S. August jobs report," Mitul Kotecha, a Hong Kong-based strategist at Credit Agricole CIB, wrote in a research note.

Gains were more muted on mainland Chinese stock markets, with the Shanghai Composite index edging up 0.2 percent to 2,571.93 even after a monthly survey showed manufacturing regaining momentum in August. The purchasing managers index crept 0.2 points higher to 50.9, indicating activity expanded slightly.

On Wall Street on Wednesday, U.S. stocks ended higher for a fourth straight day. The Dow rose 0.5 percent to end at 11,613.53. The Standard & Poor's 500 index rose 0.5 percent to 1,218.89. The Nasdaq composite index rose 0.1 percent to 2,579.46.

In currencies, the euro dropped to $1.4375 from $1.4380 late Wednesday in New York. The dollar rose to 76.95 yen from 76.60 yen.

Benchmark oil for October delivery rose 29 cents to $89.10 in electronic trading on the New York Mercantile Exchange. Crude rose 9 cents to settle at $88.81 on Wednesday.

In London, Brent crude for October delivery rose 18 cents to $115.03 on the ICE Futures exchange.