HONG KONG (AP) - Asian stocks rallied Thursday, tracking an overnight surge on Wall Street, amid a brightening outlook for the U.S. economy -- a key export market for Asian companies.
Investors took heart after the Dow Jones industrial average mustered its biggest two-day point gain in five years after a Federal Reserve official hinted that the central bank may lower interest rates again.
Hong Kong's Hang Seng Index was up 1,175.46, or 4.3 percent, at 28,546.7 points in afternoon trading. In Tokyo, the Nikkei 225 average shot up 359.96 points, or 2.38 percent, to finish at 15,513.74 points.
Markets in Australia, Singapore, South Korea and Philippines also advanced.
Asian stock markets have been battered this month as investors worried about fallout from the monthslong subprime mortgage crisis in the U.S.
But sentiment seems to be improving as companies that made losing bets on subprime mortgages, such as Citigroup Inc. and Freddie Mac, are coming up with ways to raise cash.
Japanese investors snapped up auto and banking shares after the yen declined against the dollar, which helps the country's exporters by inflating their foreign revenues when repatriated. Gainers included Nissan Motor Co. and Mitsubishi UFJ Financial Group Inc.
The U.S. dollar was trading at 110.01 yen midafternoon, up from 109.97 yen late Wednesday in New York, and after falling below 108 yen earlier this week.
In Hong Kong, all 40 blue chips were higher, with property stocks rallying on expectations Hong Kong banks would match a possible U.S. rate cut. Stocks of Sino Land, Hang Lung Properties and Sun Hung Kai Properties were all higher.
The Dow rose 331.01, or 2.55 percent, to 13,289.45 on Wednesday in New York, adding to the blue chip index's 215 point gain on Tuesday and giving the market's best known indicator its largest two-day point gain since Oct. 11, 2002.
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