Asia stocks gain on U.S. rally, Europe stimulus talk

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange on Oct. 22, 2014.

REUTERS

Hopes for fresh stimulus from the European Central Bank and China's steady growth bolstered Asian stocks Wednesday after the S&P 500 had its best day of the year. European markets drifted lower.

Japan's Nikkei 225 jumped 2.6 percent to 15,195.77 and Hong Kong's Hang Seng added 1.4 percent to 23,403.97. Australia's S&P/ASX 200 climbed 1.1 percent to 5,385.90. In Europe, Germany's DAX was up 0.1 percent at 8,893.45 while France's CAC 40 was off 0.2 percent at 4,073.80. Britain's FTSE 100 dropped 0.3 percent to 6,352.07. Futures pointed to a lackluster start on Wall Street. Dow futures were flat and S&P 500 futures fell 0.2 percent.

As the region teeters on the brink of recession again, speculation is growing that the European Central Bank will further expand liquidity in the financial system by expanding bond purchases. Analysts say the ECB is suspected of already buying Italian covered bonds and might be planning to expand that to other nations. "Considering the weakness in Europe, the prospect of an increase (in bond purchases) is real as it looks to increase access to financing, and even more stimulus," said IG strategist Evan Lucas.

China's third quarter growth of 7.3 percent, announced Tuesday, was reassuring for investors who were expecting a sharper slowdown in the world's No. 2 economy. The figure suggests China won't reach its official 7.5 percent growth target this year but nor is the economy in a tailspin even as measures to cool an overheated property market ripple through the broader economy.

Oil prices were little changed after weeks of declines. Brent crude added 15 cents to $86.37 a barrel on the ICE exchange. Benchmark crude was up 3 cents at $82.65 a barrel in electronic trading on the New York Mercantile Exchange.

The euro rose to $1.2689 from $1.2713 late Tuesday. The dollar fell to 106.82 yen from 106.98 yen.