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Cautious Gains In Asia Temper Market Rally

Asian stock markets climbed Friday after the world's major powers pledged more than $1 trillion to combat the global economic crisis and China's hard-hit factories showed signs of new life.

But gains were somewhat subdued as caution began to set in after a spectacular rally that's lifted leading markets from Japan to New York by double-digit percentages in recent weeks.

The latest catalyst came Thursday as the Group of 20 industrial and developing nations promised $1.1 trillion to the International Monetary Fund and other development bodies to lend to less well-off countries reeling from the global economic turmoil. They also vowed new efforts to clean up banks' tattered balance sheets, shut down tax havens and tighten financial regulations.

Investors, their expectations for any meaningful progress low, cheered the moves - the latest as governments everywhere bring unprecedented resources to bear against the worst economic slump since the Great Depression.

"There was a fear at the G20 was going to turn out to be damp squid and it appears instead there was some unity and progress," said Miles Remington, head of Asian sales trading at BNP Paribas Securities in Hong Kong.

Also boosting sentiment were new figures showing Chinese manufacturing expanded slightly in March for the first time in six months. The data supported hopes the Chinese economy - the world's third-largest and a key source of demand for other Asian countries - is nearing a bottom.

Japan's Nikkei 225 stock average added 30.06 points, or 0.3 percent, to 8,749.84, but traded well off its highs. Hong Kong's Hang Seng climbed 73.79, or 0.5 percent, to 14,595.76. South Korea's Kospi rose 0.5 percent to 1,283.75.

Elsewhere, Shanghai's key index edged up about 0.6 percent. Stock measures in Australia and Taiwan gained over 1 percent.

Carmakers continued to race ahead, with Toyota Motor jumping 7 percent and Nissan Motor up 6.2 percent. Resource firms like Australia mining heavyweight BHP Billiton Ltd., up 3.7 percent, also struck gold.

Overnight in New York, Wall Street's buying spree showed no signs of slowing as investors took comfort in an accounting rule change that will help banks pare their massive losses on bad assets.

Sentiment got a further boost from still more positive U.S. economic data, this time highlighting a large increase in factory orders in February. That followed better-than-expected readings on pending home sales, manufacturing activity and auto sales the day before.

The Dow Jones industrial average gained 216.48, or 2.8 percent, to close at 7,978.08, posting its best four weeks since 1933. Broader market indicators also rose sharply, with the Standard & Poor's 500 index up 23.30, or 2.9 percent, to 834.38.

But Wall Street futures were slightly lower, suggesting U.S. markets might give back some of their gains. Dow futures fell 26 points, or 0.3 percent, to 7,932 and S&P500 futures shed 3.2 points, or 0.4 percent, to 832.30.

Those numbers were a reminder that even a G20 consensus combined with positive economic data isn't likely to signal a quick exit from the global recession. Indeed, another number released Thursday was decidedly less positive: The U.S. Labor Department said initial claims for unemployment insurance rose to a seasonally adjusted 669,000 from the previous week's revised figure of 657,000.

"We have to be patient here. Nothing will change immediately," senior trader Howard Wheedlon told CBS evening News anchor Katie Couric at his BGC Partners office in London on Thursday. "We've moved a long way forward today but we still have a long way to go."

Watch Katie Couric's report on what changes the G20 may bring:

Oil slipped below $52 a barrel Friday in Asia after surging overnight on investor optimism crude demand will soon rebound if the U.S. recession has bottomed. Benchmark crude for May delivery fell 68 cents to $51.96. The contract rose $4.25 overnight to settle at $52.64.

In currencies, the dollar slipped to 99.57 yen from 99.79 yen. The euro was lower at $1.3429 from $1.3461, after the European Central Bank cut its benchmark interest rate by a less-than-expected quarter of a percentage point to 1.25 percent, a record low.

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