Upbeat news from Singapore also boosted investor confidence, as economic growth in the trade hub climbed 20.4 per cent annualised in the three months to June, ending four quarters of contraction. Analysts said other export-dependent Asian economies were also expected to see improved second quarters, but questioned whether that could be sustained amid still weak consumer demand in the region’s major Western markets.
Japan’s Nikkei average ended 2.3 per cent higher, a welcome break from a string of recent losses MSCI’s measure of stocks elsewhere in the Asia-Pacific rose 2.8 per cent. The gains tracked Monday’s 2.5 per cent rally in the S&P 500 and owed much to a single banking analyst.
Nissan Motor surged 7.3 per cent on its plans to boost production capacity in China, while Komatsu jumped 6.6 per cent after reports said the company returned to profitability in the April-June quarter.
Banks such as Sumitomo Mitsui Financial Group climbed 5.4 per cent to ¥3,700 and Mizuho Financial Group rose 3.1 per cent to ¥199 after their US peers gained the previous day.
Mitsubishi Heavy Industries Ltd gained two per cent to ¥350 and electronics conglomerate Toshiba Corp rose 3.4 per cent to ¥333 following a report said that they will jointly develop a next generation nuclear power reactor.
In a change of mood, influential Wall Street analyst Meredith Whitney upgraded Goldman Sachs Group to a “buy”, saying bank shares were in for at least a short-term gain of 15 per cent. The S&P Financial Index rose 6.5 per cent as a result, while Goldman rose 5.3 per cent.
Also helping sentiment was a report that the US government was in advanced talks to help embattled CIT Group, one of the nation's major lenders to small and medium sized business.
Australian shares ended up nearly 3.5 per cent after a surprisingly strong survey of Australian business conditions. The Aussie dollar got a lift to $0.7856 from the news, which was seen as lessening the need for further cuts in interest rates.
The survey of over 400 firms from National Australia Bank showed a marked pick up in sales and profits, along with a record improvement in employment intentions.
Hong Kong shares surged 3.66 per cent to their biggest one-day gain in a month. Stocks in Shanghai jumped 2.1 per cent to a 13-month closing high, with financial shares joining a global rally and Baosteel climbing after it secured a surprisingly big increase in steel prices.
HSBC contributed the most to the rise of the index, advancing 4.4 per cent to HK$64.25. Chinese lender China Construction Bank rose 3.3 per cent to HK$5.61, Bank of China rose 4.1 per cent to HK$3.56, and ICBC was up 2.6 per cent at HK$5.05.
Chinese insurer China Life climbed three per cent to HK$30.55.
Tsingtao Brewery surged 6.7 per cent to a 17-month high of HK$26.20 after the brewer said it expected first-half profit to increase 60-70 per cent year on year.
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