Asian markets notch strong gains after Dow hits record high

HONG KONG (AFP) - Asian markets rallied on Wednesday following a record-breaking performance by shares on Wall Street, with Tokyo and Sydney both hitting multi-year highs.

The stand-out player was Japanese electronics giant Sharp, which surged more than 17 per cent in the morning on reports that it was ready for a tie-up with South Korea's Samsung worth more than US$100 million (S$125 million).

Tokyo added 2.13 per cent, or 248.82 points, to end at 11,932.27 while Sydney was 0.82 per cent higher, adding 41.4 points to 5,116.8 - both indexes sitting around highs not seen since September 2008.

Seoul was up 0.20 per cent, or 4.13 points, at 2,020.74, while Hong Kong rose 0.96 per cent, or 217.34 points, to 22,777.84 and Shanghai added 0.90 per cent, or 20.87 points, to 2,347.18. Singapore rose 1.34 per cent, or 43.55 points, to 3,291.81.

The Dow Jones Industrial Average finished 0.89 per cent higher at 14,253.77, beating by nearly 90 points its former record seen on October 9, 2007, just before the onset of the global financial crisis.

The surge on the Dow, which has seen the index more than double since its trough in March 2009, comes despite uncertainty in the US economy and as Washington battles over how to trim its huge deficit. Shares were also helped by a pick-up in the country's services sector.

"Monetary easing measures by Japan, the US and Europe are providing excess liquidity in the market. The Dow's gains are just part of it," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

Also on Wall Street, the S&P 500 climbed 0.96 per cent to close at 1,539.79, just two per cent short of its own record, while the tech-heavy Nasdaq added 1.32 per cent.

In Tokyo trade, Sharp soared 17.06 per cent at one point after the Nikkei business daily and other media reported that Samsung was set to make a capital injection. The firm ended 14.05 per cent higher, while Samsung closed up 0.65 per cent. The deal, in which Sharp will sell new shares, will provide much-needed support for the troubled Japanese firm while giving Samsung greater access to smartphone and tablet computer screens. Sharp confirmed the US$111 million capital injection deal with Samsung shortly after the Tokyo and Seoul markets closed.