Asian stocks powered higher Monday, tracking strong gains on US and European markets as optimism mounted that the global economy is getting back on its feet after the worst recession in decades.

The upbeat start to the week came after stocks rose to fresh 2009 highs on Wall Street Friday in response to bright housing data and Federal Reserve chief Ben Bernanke’s comments that global recovery prospects “appear good.”
“This is a new wave of optimism,” IG Markets institutional dealer Chris Weston told Dow Jones Newswires. “There’s no way this momentum on Wall Street will just turn around.”
Tokyo soared 3.35 per cent by the close while Seoul climbed 1.98 per cent. Taipei ended up 2.76 per cent and Manila 5.11 per cent. Hong Kong closed 1.9 percent higher, while the Shanghai Composite ended up 1.10 percent.
Signs that the Chinese market is stabilising after recent sharp falls sparked by fears of overheating calmed investors’ nerves across the region.
“The bubble in the (Shanghai) market valuation has been corrected to a degree,” said Great Wall Securities analyst Zhang Yong.
Investors took their cue from Wall Street where the Dow Jones Industrial Average surged 1.67 per cent on Friday to finish at 9,505.96, posting a fourth straight daily gain. The blue-chip index had not finished above 9,500 since early November and has now climbed about 45 per cent from its March low.
Fed chairman Bernanke lifted spirits, telling a meeting of central bankers in Jackson Hole, Wyoming, that the global outlook for recovery from the worst slump in six decades appeared good.
“After contracting sharply over the past year, economic activity appears to be leveling out, both in the United States and abroad, and the prospects for a return to growth in the near term appear good,” Bernanke said.
Figures showing existing-home sales in the United States surged 7.2 per cent in July to a seasonally adjusted annual rate of 5.24 million units - the largest gain since records began in 1999 - poured more fuel on the rally.
The report “encouraged expectations of a US housing recovery,” said NAB Capital analyst John Kyriakopoulos.
Economists say a recovery in the stricken housing sector, after a bubble collapsed three years ago, is key to pulling the world’s largest economy firmly out of recession.
Europe’s main stock markets had also soared on Friday as encouraging economic data in the eurozone reinforced the positive mood.
The eurozone’s purchasing managers’ index, compiled by data and research group Markit, rose to 50 points in August from 47 points in July - a record jump and the highest level since the economic crisis began last year. (Source: channelnewsasia.com)