HONG KONG – Asian stock markets recovered Wednesday as better-than-expected U.S data gave investors hope of a turnaround in the world's largest economy and helped offset their fears of a possible swine flu pandemic.
After two days of declines, most of the region's major markets posted broad-based gains. Airlines, slammed in recent days amid worries about the disease's toll on travel, rebounded sharply. The dollar strengthened against the yen, while oil prices were slightly lower.
Investors were cheered after a closely watched measure of U.S. consumer confidence soared in April, suggesting Americans may be ready to spend again — a boon for export-driven Asian countries. An easing in the pace of home price declines also boosted sentiment.
Worries about swine flu and its impact on a world economy still reeling from recession has consumed the market this week. Countries everywhere have warned against or slapped outright bans on travel to Mexico, where the vast majority of cases are, as new infections cropped up in New Zealand and Israel.
While the rapid spread of the virus, suspected in more than 150 deaths in Mexico, continues to inspire caution, many investors are waiting to see whether the outbreak develops into a full-blown epidemic.
"There are more flu cases today, but it hasn't seriously escalated yet," said Nicole Sze, Singapore-based investment analyst Nicole Sze of Bank Julius Baer & Co., which manages about $300 billion in assets. "Until we see a serious escalation the markets will likely trade in a range and be more focused on the economy and earnings."
South Korean shares led the market after the country posted a record current account surplus in March. The Kospi benchmark rose 30.42, or 2.3 percent, to 1,330.66.
Chinese shares were helped by solid earnings from China Petroleum & Chemical Corp., Asia's largest refiner by capacity, as well as strong demand for stakes in top lender ICBC sold by foreign companies this week, analysts said.
Hong Kong's Hang Seng gained 256.70 points, or 1.8 percent, to 14,811.81, and Shanghai's main index added 1.5 percent to 2,436.82. Markets in Singapore, India and Taiwan also gained. Australian shares were lower in volatile trade.
Japan's market was closed for a national holiday.
Overnight in New York, the consumer reading helped balanced out worries that large banks might need more capital following the government's stress tests. The Dow Jones industrial average ended the day down 8.05, or 0.1 percent, to 8,016.95 after being down as much as 86 ahead of the consumer confidence report.
Broader stock indicators also lost ground. The Standard & Poor's 500 index fell 2.35, or 0.3 percent, to 855.16.
Oil prices fell modestly in Asian trade, with benchmark crude for June delivery off 21 cents at $49.71. The contract slipped 22 cents to settle at $49.92 overnight.
In currencies, the dollar gained to 96.81 yen from 96.55 yen. The euro rose to $1.3203 from $1.3134.