Asian stocks rally on central bank offensive

Asia-Pacific stocks rallied strongly Friday after the world's most powerful central banks offered dollar supplies to benefit lenders under pressure from the eurozone debt crisis. The European Central Bank and its US, Japanese, Swiss and British counterparts announced Thursday they would act in concert to lend US dollars to banks facing a shortage of the American currency. The move sent European stocks soaring and helped Wall Street stay in positive territory for the fourth day in a row, with the Dow Jones Industrial Average closing up 1.66 percent at 11,433.18. Asian shares followed the lead. Japan's Nikkei jumped 1.94 percent in the afternoon. The index could rise on temporary relief after the central banks' pledge, said Hideyuki Ishiguro, a strategist at Okasan Securities. But the fundamental debt issue in Europe remains unresolved and could lead to some profit-taking later in the day ahead of a three-day weekend in Japan, he told Dow Jones Newswires. Hong Kong shares also got off to a strong start. The Hang Seng Index rose 2.14 percent by the break and South Korea's benchmark KOSPI index soared 3.35 percent in afternoon trading. In Australia, the market was trading up 1.94 percent in the afternoon, while the broader All Ordinaries was up 1.85 percent. But the European debt crisis is still weighing on investors, Commsec market analyst Steven Daghlian said. "Even when you take into account the gains we've seen over the past couple of days in Australia, the All Ords Index is still down about 14 percent this year and we lost about five percent in September, so we still have a long way to go," Daghlian said. The euro held on to gains it had clocked up in New York late on Thursday after plunging earlier this week. It was fetching $1.3859 in early Asian trade, compared with $1.3882 late Thursday in New York where the common European currency jumped after the move to aid Europe's struggling banks. The euro also stood at 106.44 yen from 106.40 yen in New York. In Asia on Thursday the common currency had been sitting at $1.3720 and 105.20 yen, while on Monday it was foundering at around $1.3500 and a 10-year low below 104 yen. Safe haven gold was also losing its lustre as risk appetite picked up. At 0415 GMT, the precious metal was trading at $1,766.90 per ounce. On oil markets New York's main contract, light sweet crude for delivery in October, rose five cents to $89.45 in morning trade and Brent North Sea crude for October climbed 14 cents to $112.44.