Hints of an unlikely interest rate increase in September and the strong U.S. economic data lifted Wall Street by 2 percent on Thursday and rolled over to optimism in Asian markets early Friday.
The S&P 500 and Nasdaq Composite posted their biggest two-day increases since 2009 while the benchmark Dow Jones industrial average hit its biggest two-day percentage gain since 2008, according to Reuters.
This has so far boded well for the Asia-Pacific stocks, which as of 7:13 a.m. in London, rose by 2 percent, easing the sixth consecutive week of declines, reported Bloomberg. Australia's S&P/ASX 200 Index rose 0.6 percent while Japan's Topix index recorded 3.3 percent gains. China's Hang Seng Index, on the other hand, added 0.4 percent in Hong Kong.
Scott Brown, chief economist at Raymond James in St. Petersburg, Fla. told Reuters that the worst is probably over, but it would still take awhile to go back to normal and downward risks are still on the horizon.
Before the Asian markets close, stocks have moved closer to erasing this week's losses triggered by the cautious optimism set by higher commodities brought by China's extended support for its equity markets.
Chris Green, director of economics and strategy at First NZ Capital Ltd. in Auckland, told Reuters that the underlying strength of the U.S. economy had stabilized the global markets.
U.S. data on housing, consumer confidence, the labor market and economic growth all showed the economy's gaining momentum, the Sacramento Bee reported.
The Bureau of Economic Analysis said the U.S. economy expanded by 3.7 percent from April through June, correcting the 2.3 percent reported last month. U.S. businesses had built their inventories that rebounded to power up the U.S. economy, the publication added.
Moreover, there are less worries on the Fed's move on interest rates. New York Fed President William Dudley said a rate hike now appears "less compelling," according to CNN.
