Asian markets gain as oil prices fall

The Nikkei 225 index in Tokyo gained almost 1 percent to close at 13,312.93. Hong Kong's blue-chip Hang Seng Index was up 2.4 percent at 23,075.43 in afternoon trade.

Elsewhere, markets in Australia, South Korea and Singapore were up around 2 percent. In India, the Sensex benchmark shot up nearly 5 percent--a day after a tight confidence vote for the government ended weeks of political uncertainty.

The gains came despite ongoing worries about the toll of America's slumping housing market and the credit crisis on financial firms.

While disappointing results from American Express Co. and Wachovia Corp. added to those fears, Asian traders focused more on the good news of easing oil prices. Crude futures lost more than US$3 overnight to bring crude's decline since July 11 to nearly US$20 a barrel.

Wall Street rallied on the drop, with the Dow closing almost 1.2 percent higher at 11,602.50 points. Although Asian stocks could move higher in coming days, analysts weren't ready to declare an end to the region's bear market.

"The overall U.S. economy is still weak, but the funds will likely keep flowing to the region's market in the short term," said Castor Pang, an analyst at Sun Hung Kai Financial in Hong Kong. "If there's any bad news, especially about earnings in the U.S., that could hurt the rebound."

Midafternoon in Singapore, light, sweet crude for September delivery was trading just above US$127 a barrel in electronic trading on the New York Mercantile Exchange.

In Hong Kong, the lower oil prices drove China Petroleum & Chemical Corp.--also known as Sinopec, Asia's biggest refiner by volume--about 4.8 percent higher. Airliner China Southern soared 9.9 percent.

In Japanese, manufacturers such as Honda Motor Co. gained.