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Asian stocks soar on possible US rescue package

JEREMIAH MARQUEZ | September 18, 2008 11:53 PM EST | AP

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Traders work in the product options pit at the New York Mercantile Exchange in New York, Thursday, Sept. 18, 2008. Financial markets appeared less strained Thursday, but investors were still nervous, seeking safe investments like gold and Treasury bills and showing some reluctance to return to stocks. (AP Photo/Seth Wenig)

HONG KONG — Asian stock markets soared Friday as a news of a U.S. government plan to rescue banks from risky mortgage debt brought hope of a letup in the world's worst financial crisis in decades.

Japan's Nikkei 225 average advanced 3.2 percent to 11,859.75, while Hong Kong's Hang Seng Index shot up nearly 7 percent to 18,836.90.

Stock measures in China, Taiwan, South Korea and Australia were also sharply higher.

After a week of steep losses, regional markets were lifted partly by gains Thursday on Wall Street, where the Dow Jones industrial average surged 410.03, or 3.86 percent, to 11,019.69 _ the benchmarks biggest percentage point gain since October 2002.

Investors also were reacting to news that the U.S. government was seeking the power to rescue banks by buying distressed assets at the heart of the financial system's crisis that has brought down Wall Street giants Lehman Brothers, Merrill Lynch and Bear Stearns.

Details of the plan were still being worked out, but U.S. Treasury Secretary Henry Paulson emerged from a nighttime meeting on Capitol Hill to say he hoped to have a solution "aimed right at the heart of this problem."

The news triggered a rally in U.S. stock futures. Dow futures rose 157 points, or 1.4 percent, to 11,142 and S&P 500 futures rose 27 points, or 2.3 percent. to 1230.40 Thursday night.

Asian financials, meanwhile, powered higher, with China's biggest lender, Industrial & Commercial Bank of China Ltd, or ICBC, rising 14 percent. Banks in Japan and Australia also gained.

In currencies, the dollar climbed against the yen to 106.74.

Filed by Katharine Zaleski  |  Report Corrections