Asian markets on rare optimism

Asian markets enjoyed some Christmas cheer Wednesday as strong US housing data and a successful bond issue by Spain added to an upbeat business and consumer outlook in Germany.Dealers appeared to have overcome their nervousness seen earlier this week following news that North Korean leader Kim Jong-Il had died, leaving the nuclear-armed rogue nation in a state of uncertainty.Tokyo rose 1.48 percent, or 123.50 points, to 8,459.98 and Seoul surged 3.09 percent, or 55.35 points, to 1,848.41 while Sydney added 2.13 percent, or 86.4 points, to close at 4,139.5.Hong Kong gained 1.52 percent and Shanghai rose 0.31 percent in the afternoon.Regional traders were given a strong cue by Wall Street, where the Dow surged 2.87 percent Tuesday -- its strongest rally in four weeks -- after official figures showed new home starts jumped 9.3 percent in November.The rise is the biggest since April 2010 when tax credits, which have since expired, were driving sales.The data followed a series of rare encouraging announcements from Europe.In Germany two leading economic indicators came up better than expected.The Ifo economic institute said its closely watched business sentiment index defied expectations for the second month in a row, while a separate survey showed consumer confidence also holding up despite the long-running European debt crisis.Adding to the Christmas joy Spain, where a new government is due to take over, enjoyed another strong bond auction as it sold 5.640 billion euros ($7.4 billion) of short-term debt, more money than first planned.The sale pushed down the yield on three-month bills to 1.735 percent from from 5.110 percent in the last auction, a sign of easing tensions in the eurozone.The European Central Bank also played its part in raising confidence when it said it would provide cheap three-year loans to under-pressure banks as it tries to avoid a potential credit crunch and recession.Meanwhile beleaguered Greece said it was nearing a crucial deal with private banks to write down a chunk of its foreign debt that is expected to save Athens more than 100 billion euros in financing costs.Any kind of lift on the macro front or any lack of bad news is good news, CIMB economist Song Seng Wun in Singapore told Dow Jones Newswires.He added that there were no disasters from Europe and US numbers show signs its not falling off a cliff, with housing market numbers giving some grounds for optimism.As negotiations over a new fiscal union to combat the eurozone debt crisis opened, the European Union announced a new summit for January 30 as officials struggle to get ahead of the two-year fiscal crisis.The news from Europe and Washington boosted the euro on Tuesday in New York, where it rose to $1.3131 and 101.88 yen, up from the previous days $1.2996 and 101.41 yen. In Asian trade Wednesday it stood at $1.3112 and 102.00 yen.The dollar bought 77.77 yen, compared with 77.89.Mondays sell-off sparked by Kims death has been erased as the handover of power in Pyongyang seemed to go smoothly, with the former strongmans son Kim Jong-Un hailed by North Korea as the great successor.On oil markets, New Yorks main contract, light sweet crude for delivery in February, advanced 74 cents to $97.98 a barrel and Brent North Sea crude also for February delivery was 50 cents higher at $107.23.Gold was trading at $1,626.20 an ounce at 0610 GMT, against $1,604.25 an ounce late Tuesday.Taipei surged 4.56 percent, or 303.84 points, to 6,966.48.The index was the regions best performer after the government said late Tuesday that it would allow its national stabilisation fund to buy up to $16 billion worth of shares to arrest a steep fall in the market.Taiwanese equities have lost almost a third of their value since the beginning of the year due to the debt crisis in Europe -- a crucial export market -- as well as ongoing woes in the US and a slowdown in China.Cathay Financial Holding closed at Tw$29.95 and Chang Hwa Commercial Bank at Tw$16.1. Both were 7.0 percent limit-up.Manila closed 0.61 percent higher, adding 26.70 points, to 4,368.88.BDO Unibank gained 1.4 percent to 57.80 pesos, Philippine Long Distance Telephone fell 0.3 percent to 2,584 pesos and Digital Communications was 0.6 percent higher at 1.61 pesos.Wellington rose 0.66 percent, or 21.05 points, to 3,223.08.Fletcher Building rose 2.4 percent to NZ$6.02 Air while New Zealand added 0.57 percent to NZ$0.88 and Telecom slipped 0.99 percent to NZ$2.01.