HONG KONG - GLOBAL stock markets soared on Friday after a punishing week as news of a possible US government plan to rescue banks from toxic mortgage debt brought hope of a letup in the world's worst financial crisis in decades.

Hong Kong's Hang Seng Index surged a stunning 9.6 per cent to 19,327.73, while Japan's Nikkei 225 average rose 3.8 per cent to 11,920.86.

As trading opened in Europe, Britain's FTSE 100 jumped 8 per cent to 5,268.70 and France's CAC 40 shot up 6.5 per cent.

Germany's DAX added 3.9 per cent.

Wrapping up one of the most turbulent weeks in memory, Asian and European markets surged after an overnight rally on Wall Street, where the Dow Jones industrial average advanced 410.03, or 3.86 percent, to 11,019.69 - the biggest percent gain since October 2002.

Investors also took heart from word that the US government was seeking the power to rescue banks by buying distressed assets at the heart of the financial system turmoil that's brought down Wall Street giants Lehman Brothers, Merrill Lynch and Bear Stearns - news that sent global markets plunging earlier this week.

Details of the plan were still being worked out, but US Treasury Secretary Henry Paulson emerged from a nighttime meeting on Capitol Hill to say he hoped to have a solution 'aimed right at the heart of this problem'.

'It definitely gives investors a light at the end of the tunnel,' said Mr Daniel McCormack, a strategist for Macquarie Securities in Hong Kong. 'The solution is of such a magnitude that it could eventually fix the problems ... That's hugely important at the moment because that's what markets are focused on.'

The biggest bonus of a potential government fix is it could help the banking industry as a whole, said Mr Scott Fullman, director of derivative investment strategy for New York-based institutional broker WJB Capital Group. Until now, the US government has selectively bailed out institutions that were the most vulnerable.

The news triggered a rally in US stock futures, suggesting Wall Street would advance on Friday, too. Dow futures rose 245 points, or 2.2 per cent, to 11,227, and S&P 500 futures climbed 39 points, or 3.2 per cent, to 1,242.

'Bear markets are extremely sensitive, and this market on a scale of one to 10 is a 13,' Mr Fullman said. 'I don't say any prudent money manager would say we're out of the woods, but right in this moment it all seems positive and leading toward an upward move for the market going into Friday session.'

The dollar also rose, advancing to 107.42 yen, while the euro fell to US$1.4211. That helped stocks of major exporters like Toyota Motor Corp. and Sony Corp.

In China, the Shanghai benchmark jumped 9.5 per cent - its biggest gain ever - after the government eliminated a tax on share purchases and said it was buying shares in state-owned banks.

Bank of China, the country's second-largest lender, surged 10 percent , the daily maximum limit. China Construction Bank also had gained 10 per cent.

In Russia, the two main stock exchanges opened, then closed, then opened again amid wild price swings. MICEX, where most share trading takes place, was up 23.1 per cent on the day, while the RTS rose 15.5 per cent.

Asian markets, meanwhile, were helped by the Bank of Japan, which pumped another 2 trillion yen (S$26.8 billion) into money markets, its seventh injection this week.

The move followed Thursday's coordinated effort by central banks around the world to keep the financial system liquid.

Europe's central banks also offered up more cash to jittery banks on Friday, putting a combined US$90 billion into money markets.

Word of a possible US bailout lifted Asian banks, which had tumbled earlier this week.

Macquarie Group Ltd., Australia's biggest investment bank and securities firm, exploded almost 38 per cent.

Shares of China's biggest lender, Industrial & Commercial Bank of China Ltd, or ICBC, rose 16.2 per cent in Hong Kong and 9.9 per cent in Shanghai.

Japanese megabanks were up strongly, with the country's leading bank, Mitsubishi UFJ Financial Group Inc., up 10.5 per cent and Mizuho Financial Group adding 12.6 per cent.

In South Korea, Korea Exchange Bank's shares fell 10.3 per cent after British bank HSBC Holdings PLC said it canceled an agreement to purchase a controlling stake in the company.

Oil prices rose in Asia. Light, sweet crude for October delivery gained US$1.63 to US$99.51 a barrel in electronic trading on the New York Mercantile Exchange.

SINGAPORE
Singapore shares made their biggest one-day gain in more than a year to close 5.78 per cent higher on Friday.

Dealers said sentiment rose on news the US was preparing a plan to clear bad debts that have weighed down banks and caused a global financial crisis.

The blue-chip Straits Times Index rose 139.86 points to 2,559.07.

KUALA LUMPUR
Malaysian share prices surged 3.4 per cent higher on Friday driven by an overnight recovery on Wall Street as investors bought into bluechips, dealers said.

The Kuala Lumpur Composite Index rose 34.04 points to close at 1,025.70.

HONG KONG
Hong Kong shares closed up 9.6 per cent on Friday as markets across Asia rallied on news the US would throw banks a lifeline to deal with bad debts behind the global financial crisis.

The Hang Seng Index added 1,695.27 points to finish at 19,327.73 on turnover worth HK$124.57 billion (S$22.98 billion).

SHANGHAI
Chinese share prices closed 9.46 per cent higher on Friday after the government abolished a stamp tax on buying shares, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, was up 179.25 points at 2,075.09.

The Shanghai A-share index gained 188.21 points, or 9.45 per cent, to 2,179.11 and the Shenzhen A-share index jumped 51.00 points, or 8.88 per cent, to 625.33.

TOKYO
Japanese shares closed up 3.76 per cent on Friday, clawing back heavy losses a day before as the US government and the world's central banks took action to keep the global financial crisis from deepening.

Asia's largest bourse gained support from reports that Washington was preparing to create a new body to rescue troubled financial firms, while also tracking an overnight rebound on Wall Street.

The Tokyo Stock Exchange's benchmark Nikkei-225 index closed up 431.56 points to 11,920.86.

The broader Topix index of all first-section shares rose 51.44 points or 4.69 per cent to 1,149.12. -- AFP, BERNAMA, REUTERS

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