Asian stocks sprint higher on heels of Wall Street

Asian stock markets rose sharply Thursday, chasing Wall Street higher as merger activity and hopes of a US interest rate cut injected fresh momentum into a global rally, dealers said.
A positive lead from China also galvanised buying interest after Shanghai shares smashed through the 5,000-point level for the first time.
European stock markets extended gains in early trade after Wednesday's strong advance on hopes that the worst of the recent storm sparked by problems in the US subprime mortgage sector to risky borrowers is now over.
Many Asian stock markets posted gains of more than two or three percent after Wall Street continued a recovery overnight on hopes that the US central bank will ride to the rescue with an interest rate cut to calm credit fears.
"The market will still experience jitters in the coming weeks with investors unsure of how many more (subprime) skeletons may fall out of the closet," said CommSec equities economist Craig James in Sydney.
"But it seems pretty clear investors over-reacted with the recent sell-down," he added.
Markets continued to pin their hopes on a cut to the US Federal Reserve's funds rate at which commercial banks lend to each other to further ease credit fears and to restore market stability.
"There are growing hopes that the Fed will lower its federal funds rate to calm the markets," said Kazuhiro Takahashi, equity department head of Daiwa Securities SMBC.
Dealers said investors were gradually regaining their confidence after the Fed on Friday cut its discount rate that it charges for lending to banks, helping to stem last week's brutal selloff.
But recent credit market turmoil could require more time and "pain" to resolve as investors reassess risk, Bank of Japan governor Toshihiko Fukui said.
The central bank will keep a close watch on financial market volatility as it decides when to next raise interest rates from 0.5 percent, Fukui said after the BoJ left its monetary policy unchanged for a sixth straight month.
In Tokyo the benchmark Nikkei-225 share index closed up 2.61 percent, regaining the key 16,000 points level as exporters benefitted from a weaker yen which is positive for overseas earnings.
"Relief came from Wall Street's gains and the softer yen, which encouraged investors to buy back shares," said Hideo Mizutani, chief strategist at Sieg Securities.
Shanghai rose 1.05 percent to close over the 5,000-point mark for the first time and record a fourth straight day of gains, dealers said.
Elsewhere, Hong Kong ended 2.77 percent higher, Seoul gained 2.3 percent, Sydney rose 2.6 percent and Wellington added 1.38 percent.
Taipei put on 2.82 percent and Manila climbed 2.9 percent, while Kuala Lumpur was up 2.1 percent in late trade and Jakarta was 2.9 percent higher.
Shares are more tempting in Asia than in the United States, the source of the recent market turmoil, said DMG Partners dealing director Gabriel Yap.
"Asia looks more attractive than the US, which is still plagued by the subprime problem," Yap said in Singapore.
Hopes that the largest US mortgage provider Countrywide Financial could escape bankruptcy cheered markets, after Bank of America announced overnight it would invest two billion dollars in the troubled company, dealers said.
Surging home foreclosures in the US have forced home lenders out of business and sent shock waves through the multi-trillion dollar mortgage sector.
The yen lost more ground in Asian trade as easing fears of a credit crunch reduced the risk aversion that drove the currency up sharply last week.
The dollar firmed to 115.78 yen in late Tokyo trade from 115.31 in New York late Wednesday. The euro gained to 156.73 yen from 156.17.