U.S. bank Wells Fargo forecast a record profit and South Korea averted recession in the first quarter, offering investors some hope that the most vicious period of the financial crisis has passed.
Some encouraging data on U.S. trade and jobless claims helped Wall Street stocks end higher for a fifth straight week, while White House economic adviser Lawrence Summers added to the rise in sentiment.
Summers said the U.S. economy will end a sense of "freefall" within a few months as government stimulus and rescue efforts take hold and inventory cycles return to normal.
Asian stocks were also higher on Friday, with Japan's Nikkei average hitting a three-month high above 9,000 points.
"The Nikkei is likely to test this year's peak of around 9,300 in the near term, supported by growing optimism towards the U.S. economy, said Takahiko Murai, general manager of equities at Nozomi Securities.
"But further gains in Tokyo stocks might be limited as executives at major firms here still hold pessimistic views on the Japanese economy."
BANKS EYED
Banks remained in focus. Sumitomo Mitsui Financial Group, Japan's third-largest bank, was flooded with sell orders after it said it faces a net loss of $3.9 billion for the financial year just ended and would raise as much as $8 billion through the sale of shares.
Chinese lender Shanghai Pudong Development Bank said it planned to raise as much as $4.4 billion via a sale of shares and bonds to bolster capital as its annual profit more than doubled on rapid loan expansion.
Profits were also improvng for Wells Fargo, which said it expects to report net income of about $3 billion for the first quarter, more than double what analysts on average expected. Wells Fargo shares soared more than 30 percent on the New York Stock Exchange on Thursday.
"We're in a market that is hungry for what I call rays of sunshine or glimmers of hopes on company fundamentals and economics," said Fred Dickson, market strategist and director of retail research at D.A. Davidson & Co in Lake Oswego, Oregon.
KOREA AVOIDS RECESSION
Markets in parts of Asia including Australia, Singapore and Hong Kong are closed for the Good Friday holiday, as are European and U.S. markets.
Stocks in Seoul jumped almost 2 percent and the won also firmed after the South Korean central bank estimated Asia's fourth-largest economy grew a seasonally adjusted 0.2 percent in the first quarter, helped by interest rate cuts and fiscal stimulus.
Korea on Thursday left interest rates unchanged, saying it saw signs the sharp deterioration in the economy was abating.
But in a sharp downgrade of its previous forecasts, the Bank of Korea said the export-dependent economy would contract by 2.4 percent in all of 2009, which would mark the first annual decline in more than a decade.
Other measures of the health of the global economy were also mixed.
The U.S. trade deficit shrank 28.3 percent in February to its smallest since November 1999 as imports tumbled and exports managed to grow slightly, while new claims for U.S. jobless aid eased.
But German industrial production dropped by almost a quarter year-on-year in February, recording its biggest annual fall since reunification in 1990, while Italy, Sweden and Finland also posted weak data.
