HONG KONG – Asian stock markets rebounded Wednesday as hopes China would expand measures to revive its economy countered growing signs of economic decay in the U.S. and other major countries. Shanghai's index jumped more than 6 percent.
The upward move followed heavy selling over the last two days and bucked a fifth-straight day of declines on Wall Street.
Chinese shares led the region's advance on speculation the country's leaders would unveil new initiatives to bolster the world's third-largest economy, its growth now sputtering, at a legislative meeting that opens Thursday. That gave a boost to other Asian markets, including Japan and Hong Kong.
Also helping sentiment were figures suggesting Chinese manufacturing, while contracting again in February, did so at a slower rate than the previous month. For many investors, the news signaled that China's demand and growth may stabilize sooner than other countries' and in the process bring a quicker end to the worst global slowdown in decades.
Optimism over China helped offset more economic gloom elsewhere, this time in Australia, whose economy shrank 0.5 percent in the last quarter of 2008. The contraction, which surprised economists, was the country's first in almost eight years.
Despite the gains, trade was listless in some markets, and analysts were bracing for more selling that could lead Asian benchmarks to test lows reached last year at the height of the credit crisis.
"There are still too many uncertainties," said Peter Lai, investment manager at DBS Vickers in Hong Kong. "The news around the world is still bad and investors are still pessimistic. People are waiting for good news, but no one knows when that's coming."
In Japan, the Nikkei 225 stock average was up 61.24 points, or 0.9 percent, to 7,290.96, while Hong Kong's Hang Seng added 345.18, or 2.9 percent, to 12,383.61. South Korea's Kospi climbed 3.3 percent to 1,059.26.
In mainland China, Shanghai's index surged 126.68, or 6.1 percent, to 2,198.11. Analysts said reports the government may consider lowering fees collected on stock trading supplied an additional jolt.
Markets in Singapore, Taiwan and New Zealand also gained. Australia's index shed 1.6 percent.
Overnight in the U.S., Wall Street fluctuated throughout the day before closing down after Federal Reserve Chairman Ben Bernanke said economic recovery depends on the government's ability to stabilize weak financial markets.
Investors were also depressed by new figures showing U.S. auto sales hovered near historic lows last month.
The Dow fell 37.27, or 0.6 percent, to 6,726.02, its lowest close since April 21, 1997. The index is now down more than 52 percent from its record of 14,164.53 set in October 2007.
Broader stock indicators also fell. The S&P 500 index slid 4.49, or 0.6 percent, to 696.33.
U.S. futures pointed to a modestly higher open Wednesday. Dow futures rose 70, or 1.1 percent, at 6,739 and S&P500 futures gained 8.9, or 1.3 percent, to 698.40.
Oil prices weakened in Asian trade, with benchmark crude for April delivery rose 4 cents to $41.69 a barrel by midday in Singapore on the New York Mercantile Exchange. The contract rose $1.50 to settle at $41.65 overnight.
In currencies, the dollar was little changed at 98.47 yen compared to 98.43 yen. The euro fell to $1.2520 from $1.2531.