Asia stocks rally on dip in oil, hopes for banks

Asian stocks rebounded on Thursday, boosted by the biggest surge in U.S. bank shares in 16 years and a decline in oil prices, providing some relief from fears about the global credit crisis spiralling out of control.
The dollar, which benefited from the overnight fall in oil prices, gave up some of its gains on a report that sovereign wealth funds were seeking to cut their exposure to the U.S. currency, while government bonds fell as equities gained.
Major European stock markets are expected to open as much as 1 percent higher, according to financial bookmakers, after Wells Fargo & Co, the fifth-biggest U.S. bank, posted quarterly results well above expectations and raised its dividend.
Shares of high-profile Asian exporters such as consumer electronics giant Samsung Electronics gained as lower energy prices comforted investors about the outlook for demand, while shares of Japan's largest bank, Mitsubishi UFJ Financial Group , rose 3 percent on hopes for the financial sector.
Upcoming earnings announcements from Wall Street banks could be a stress test for the current rally, with Merrill Lynch & Co Inc expected to report later on Thursday its fourth consecutive quarterly loss and writedowns of up to $6 billion.
"With the subprime problems still out there, it does not mean a trend change, but we are seeing a short-term rebound led by recently battered banks and exporters," said Norio Shimura, deputy head of the equity department at Chuo Securities in Tokyo.
Japan's Nikkei share average rose 1 percent, posting the biggest daily rise in a month.
Outside of Japan, shares in the Asia-Pacific region climbed 2.2 percent for the largest single-day increase since April. On Wednesday, the index plumbed its lowest since March 2007.
Hong Kong's Hang Seng index jumped 2.6 percent, led by gains in global bank HSBC.
Despite the gains, stock markets globally remain entrenched in a bear market, with the MSCI all-countries world index down slightly more than 20 percent from an all-time high reached in November.