Asia stocks rally on global stimulus hopes; Nikkei jumps 1.2%

Investing.com - Asian stock markets posted sharp gains on Thursday, as investors hung on to hopes for action by global central banks and other authorities to stimulate growth and boost the world economy.

During late Asian trade, Hong Kong's Hang Seng Index rose 0.8%, Australia’s ASX/200 Index rallied 1.3%, while Japan’s Nikkei 225 Index jumped 1.2%.

U.S. equities had their best day of the year on Wednesday, amid growing speculation the Federal Reserve will consider more action to stimulate growth in the U.S.

Hopes for such action were lifted by comments from Fed Vice chair Janet Yellen, who said in a speech Wednesday that the central bank could further ease monetary conditions, amid mounting turmoil in global financial markets.

“I am convinced that scope remains for the FOMC to provide further policy accommodation,” Yellen said.

Attention now shifts to a Congressional testimony by Federal Reserve Chairman Ben Bernanke later in the day about the state of the U.S. economy. Traders will be looking for any hints that the Fed is considering more monetary stimulus.

The Wall Street Journal, citing interviews and Fed speeches, reported late Tuesday that the Fed was mulling new measures to stimulate growth in the world’s largest economy.

In Tokyo, the Nikkei surged for the third consecutive day on the back of strong gains in exporters, as the yen weakened against the U.S. dollar and the euro.

Shares in digital camera maker Canon jumped 3.4%, Sony rose 2%, while shares in automakers Mazda and Nissan shot up 4.1% and 3.1% respectively.

Japanese financial names were higher as well, with Mitsubishi UFJ Financial Group gaining 2.9% and Nomura Holdings climbing 3.8%

The Nikkei is down almost 16% since hitting a one-year high on March 27, after rallying more than 19% in the first three months of the year, as China’s economic growth slowed and on renewed concern about Europe’s debt crisis.

Meanwhile, shares in Hong Kong were higher, as gains in beaten-up index heavyweights supported the market.

Shares in HSBC, which commands a 15% weighting on the Hong Kong benchmark, rose 2.1% amid reports that German and European Union officials were discussing ways to bail out Spain's ailing banks.

Shares in oil giants PetroChina and CNOOC climbed 2% and 2.2% respectively, tracking a sharp rise in oil prices.

Elsewhere, shares in Australia were higher official data showed that the nation’s employers added 38,900 jobs in May, defying expectations for a decline of 2,200.

The upbeat jobs report came a day after official data showed that the nation’s economy expanded by a stronger-than-expected 1.3% in the first quarter. On an annualized rate, Australia’s economy grew 4.3%, significantly higher than expectations for growth of 3.3%.

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Looking ahead, the outlook for European stock markets was mildly downbeat, as investors looked ahead to a Spanish government debt auction later in the day. France was to also hold an auction of long term government debt.

The EURO STOXX 50 futures pointed to a loss of 0.3%, France’s CAC 40 futures dipped 0.4%, London’s FTSE 100 futures eased down 0.1%, while Germany's DAX futures pointed to a decline of 0.25% at the open.

Later in the day, the U.S. was to release official data on initial jobless claims.