Asian Stocks Advance; Nikkei Gains 2.7%

By Jeremiah Marquez

HONG KONG -- Asian stocks advanced Wednesday, with Tokyo's index closing up nearly 3%, as better-than-expected news about the U.S. and Chinese economies raised hopes the global downturn was nearing a bottom.

The region's upward swing followed Wall Street, where investors breathed a little easier after a surprise jump in home sales in December suggested the battered housing market might soon stabilize.

Investors also were heartened by Wednesday's report pointing to possible recovery in Chinese manufacturing. While manufacturing shrank again in January, the contraction was less severe than in recent months and seen by some as a sign China's stimulus measures might be taking hold.

But with the global economy and company results still in dire shape, the move higher was likely to be temporary, analysts cautioned. Amid the hopeful signs was more downbeat news Wednesday about corporate bellwethers such as Australian mining giant BHP Billiton(BHP Quote).

"It's a fictitious rebound. The figures are better than we thought, but they're still bad," said Peter Lai, investment manager at DBS Vickers in Hong Kong. "It's encouraging of course, but it's far too early to say we're seeing a revival in the global economy."

Japan's Nikkei 225 stock average rose 2.7% to 8,038.94, while Hong Kong's Hang Seng index closed higher by 2.3%. South Korea's Kospi was up 2.8% at 1,195.37.

In Shanghai, the main index gained 2.3% as traders welcomed news the purchasing managers index, a key gauge of manufacturing activity, rose to a four-month high of 45.3 on a 100-point scale. That was up from November's low of 38.8.