Asian markets recover on Wall street rally

Having endured days of jittery trading dominated by anxiety about US stocks, Asian share prices bounced back this morning, cheered by the strong rally overnight on Wall Street.

The benchmark for the Tokyo Stock Exchange, the biggest in Asia, ended the morning session up 78.63 points, or 0.79%, to 10,026.35 points.

That marked a sharp turnaround from yesterday, when the 225-issue Nikkei Stock index lost 2.62% to end at a five-month low on nagging worries about volatility on Wall Street.

Other Asian bourses also recovered this morning, encouraged by the nearly 490-point surge in the Dow Jones industrials - the second-biggest one-day gain ever.

Wall Street sentiments were boosted by hopes that reform efforts in the US may finally begin to patch up investor trust, sorely damaged by the recent spate of accounting scandals and corporate failures.

In Hong Kong, the Hang Seng Index stood at 10,109.85 points, up 137.86 points, or 1.38%, in early trading.

In Seoul, the Korea Composite Stock Price Index, or Kospi, also gained 17.03 points, or 2.36%, to 738.44 in early trading.

Share prices also rebounded in Australia, Singapore and Taiwan.

The All Ordinaries Index stood at 3,010.50 points in early trading, up 45.40 points, 1.53%. The Straits Times Index added 24.56 points, or 1.74%, in early trading to 1549.36, while the Weighted Stock Price Index climbed 111.20 points, or 2.21%, to 5,150.68 points.

Asian stocks are extremely sensitive to fluctuations on Wall Street because their economies are intimately linked to the US economy.

But Tokyo analysts say bargain-hunting at lower prices have kept the share price slides here in check and predict the Nikkei to be likely hovering around the 10,000 point level for some time.

The biggest worry for the region is whether the US stock free fall may hurt the economic recovery there. US economic recovery is critical to maintain the emerging but fragile growth going on in Japan and the rest of Asia.

Japanese government officials say the nation’s economy has bottomed out earlier this year. But the upswing could prove short-lived, and the economy could again head downward in a ‘‘double dip’’, said Shuji Shirota, economist at Dresdner Kleinwort Wasserstein in Tokyo.

‘‘The future of the American economy remains murky,’’ he said. And the falling dollar adds to such risks, Shirota added.

Japan is relying on exports to support its growth. A weak dollar is a big disadvantage for Japan’s exporters because it pushes down the value of their overseas earnings. The dollar dropped to 115-yen levels this month from about 130 yen earlier this year.