Asian Markets Chase U.S. Rally

Asian markets surged on Wednesday, as Wall Street's rally gave investors the impetus they needed to resume yen carry trade positions and buy heavily into the last week's declines.

Hong Kong and China led the giant rally, with the key indices soaring 4.9% each. The Hang Seng rose 1362 points, to 29,166, while the Shanghai Composite Index jumped 254 points, to 5412.

"There are quite a lot of discounts now in Hong Kong after the last few days," says Conita Hung, head of equities at Delta Asia Finance in Hong Kong. "Liquidity is still plentiful on the mainland and interest rates are still on a downtrend in the U.S. and Hong Kong. China is increasing [interest rates] but the increases are still quite low."

Hung has a year-end target of 33,000 for the Hang Seng, and says that property stocks in Hong Kong will be the major beneficiaries, while financials on the mainland are attractive buying opportunities as they are shielded from sub prime exposure. ...