Stocks jump after Wall Street surge

Asian stock markets rallied today, boosted by strong advances on Wall Street and a highly anticipated plan to assist debt-riddled countries in the eurozone.

Markets surged after the European Central Bank announced it was creating a new bond-buying program under which the bank will buy government bonds with maturities of one to three years.

There will be no limits to the amount of purchases it can make.

The programme is intended to keep the short-term borrowing rates of countries like Italy and Spain at manageable levels, giving them time to enact debt reduction measures and economic reforms.

Wall Street surged after the plan was announced. The Standard & Poor’s 500 index soared to its highest level since January 2008, and the Dow Jones industrial average hit its highest mark since December 2007.

In early trading, Japan’s Nikkei 225 index jumped 1.7% to 8,824.02. Hong Kong’s Hang Seng added 1.7% to 19,528.78 and South Korea’s Kospi bolted up 2% to 1,918.76.

In Europe, Germany’s Dax rallied to close 2.9% higher at 7,167.33 while the Ftse 100 index of leading British shares rose 2.1% to 5,777.34.

Investors are also keeping an eye on a raft of US economic data ahead of Friday’s closely watched non-farm payrolls report for August.

“With a series of positive news and stabilised sentiment, risk-on mood will likely filter through to the Asian session. The main focus today will be the US jobs report,” analysts at Credit Agricole CIB in Hong Kong said in a report.

Benchmark oil for October delivery fell 66 cents to US$94.87 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 17 cents to finish at US$95.53.