Asia stocks recover after Wall St. surge

TOKYO, Japan (AP) -- Most Asian markets bounced back Wednesday on hopes that a $700 billion bailout for the U.S. financial system will soon win legislative approval in Washington.

The benchmark Nikkei stock 225 index gained 108.40 points, or 0.96 percent, to close at 11,368.26. On Tuesday, it had tumbled 4.1 percent to its lowest level in more than three years on disappointment over lawmakers' rejection of the emergency proposal.

Australia's S&P/ASX200 index rose 194.1 points, or 4.22 percent, to close at 4,794.6 points.

Otherwise, regional reaction was muted because several markets were closed for holidays, including in Hong Kong, mainland China, Singapore, Indonesia, Malaysia, and the Philippines.

Investors took heart from the rebound on Wall Street Tuesday amid expectations that lawmakers will salvage a $700 billion rescue plan aimed at cleaning up the bad mortgage-related debts piled up by banks and other financial institutions. The Dow Jones industrial average surged nearly 500 points after plunging 777 points on Monday.

European markets moved modestly higher on Tuesday and Latin American stocks also regained ground after steep losses Monday.

But analysts warned that new worries were already starting to emerge about possible compromises that might be included in a reworked plan, raising questions about how effective it may be when implemented.

"The market is already expecting the plan to pass. The question now is what's next," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Securities Co. in Tokyo.

Investors are still concerned about declining U.S. housing prices and the overall U.S. economy -- a vital export market for Asia -- especially as they look ahead to the Christmas shopping season.

Major Japanese companies, including electronics and autos, are counting on solid exports to the U.S. to keep up profits, Fujito said.

"Gloomy times are expected to continue for some time," he said, adding that a turnaround couldn't be expected at least until the latter half of next year.

Elsewhere, Taiwan's main stock index rose 44.73 points, or 0.78 percent, to close at 5,464.1 points. South Korea's main stock index fell 8.39 points, or 0.58 percent, to close at 1,439.67 points.

The dollar's recent recovery, which tends to be a boost for Japanese shares, also encouraged some buying during Wednesday's Tokyo session. The dollar recovered to about 106 yen, up from about 104 yen earlier in the week.

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