(RTTNews) - Stock markets across the Asia-Pacific region rallied Friday ahead of a two-day Group of Seven industrialized nations’ meeting on optimism that a U.S. plan, which is reportedly being contemplated, to aid homeowners by subsidizing mortgage payments would provide a concrete form of financial policy to tackle the global slowdown.

After losing about 14 percent this week, crude oil price rose above $34 a barrel in Asian trading, helped by a modest gain on Wall Street Thursday and on hopes that a new mortgage plan for homeowners could pull the world’s largest economy out of the recession.

Overnight, stocks on Wall Street closed mixed amid a better-than-expected report on U.S. retail sales, reports about a government’s plan to subsidize mortgages and bad economic news from Europe, where industrial output saw its worst contraction in 15 years. While the Dow closed down 6.77 points or 0.1 percent at 7,932.76, the Nasdaq closed up 11.21 points or 0.7 percent at 1,541.71 and the S&P 500 closed up 1.45 points or 0.2 percent at 835.19.

The Japanese market snapped a three-day losing streak, helped by short covering and gains in exporter stocks such as Canon and Honda Motor following the weakening of the yen relative to the U.S. dollar.

The Nikkei 225 index closed at 7,779, up 74 points or 0.96%, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 4 points or 0.57% to 765. Rubber products, pulp and paper, and mining stocks led the bounce back, while insurance, sea transport and consumer finance stock ended in the red. On the First Section, 1031 stocks advanced compared to 545 decliners, while 130 stocks closed unchanged.

Among oil exploration stocks, Inpex rose 3.90% and Japan Petroleum gained 4.1% on short covering despite a steep fall in crude oil price to below $34 a barrel on Thursday.

Hitachi advanced 2.31% after it won Britain’s biggest order for intercity trains. Advantest gained 3.71%, Tokyo Electron added 1.47% and Kyocera moved up 2.08%, while Sony fell 0.98%.

Electronic maker Pioneer Corp plunged 20.22% after the company projected a record full-year loss and said that it would cut 10,000 jobs and exit its loss-making flat TV business.

Mitsubishi UFJ Financial Group gained 0.85% on reports about the U.S. government lowering mortgage rates. KDDI Corp, Japan’s second-largest mobile-phone operator, rallied 2.85% on anticipation that the company will report a 15% rise in its net income this year.

Tyre makers Bridgestone and Yokohama Rubber rallied by 6% and 8.55% respectively, while shipping companies Nippon Yusen KK tumbled 3.50%, Mitsui O.S. K. Lines plummeted 5.20% and Kawasaki Kisen Kaisha slumped 4.70% following a 3.2% drop in the Baltic Dry Index.

In economic news, Japanese investors purchased a net 590.0 billion yen in foreign bonds last week, the Ministry of Finance said on Friday. Japanese residents also bought a net 335.8 billion yen in foreign stocks, the ministry said. Foreigners sold a net 270.5 billion yen in Japanese bonds last week, and sold a net 277.3 billion yen in Japanese stocks.

The Australian market closed higher bolstered by gains in financial stocks and due to improved sentiment after the Australian parliament passed a A$42 billion economic stimulus package on Friday. The benchmark S&P/ASX 200 closed at 3,559, up 45 points or 1.27% and the broader All Ordinaries index rose 38 points or 1.1% to 3,497.

Among miners, BHP Billiton moved up 0.71%, and Illuka Resources jumped 4.17%, while Rio Tinto fell 1.92% after coming out of a trading halt, as investors showed a mixed response to its $19.5 billion landmark deal with China’s Aluminum Corp, known as Chinalco.

Banking stocks received good support. Commonwealth Bank added 1.45% and Westpac banking advanced 1.80%, while National Australia Bank declined 0.81%. ANZ soared 9% after the company denied market speculation about capital raising plans. Commonwealth goes ex-dividend on Monday.

Financial service provider AMP advanced 1.96% despite reporting a drop in its net income to about A$580 million ($378 million) in the 12 months to December from A$985 million in the previous year.

Australia’s biggest gold company, Newcrest mining gained 1.97% after the company reported a profit of $154 million in the first half compared to a loss in the corresponding period last year.

Retailers gained on expectations that they will benefit from the government’s stimulus package, while media and energy stocks showed a mixed trend. Woolworths moved up 0.58%, Harvey Norman Holding added 2.39%, David Jones jumped 4.35%, United Group added 3.41%, Woodside Petroleum gained 2.33%, Oil Search rose 0.43% and News Corp advanced 2.13%, while Santos fell 0.87% and Seven Network lost 0.84%.

In a major development, the upper house of the Australian Senate on Friday morning passed Prime Minister Kevin Rudd’s A$42 billion stimulus plan by a margin of 30 to 28 - one day after the bill failed to gain acceptance

South Korea’s benchmark KOSPI reversed its early losses to close at 1,192, up 13 points or 1.07% on institutional buying. Auto, technology and banking stocks were the prominent gainers. Volume was at 566.9 million shares worth 4.14 trillion won (US$2.95 billion), with gainers outnumbering decliners by 587 to 227.

Banking stocks advanced despite poor quarterly results. Korea Exchange Bank rose 1.64%, Woori Finance gained 0.97% and KB Financial, the holding firm of Kookmin Bank added 2.14%.

Among automakers, Kia Motors jumped 3.70%, Hyundai Motor added 2.35% and Ssangyong Motor ended up 0.79%.

In the technology space, Hynix Semiconductor climbed 4.40%, LG Electronics surged up 4.81%, and LG Display LCD rose 1.29%, while market heavyweight Samsung Electronics fell 1.73%.

On Friday, Moody’s Investors Services said that it has lowered its outlook for LG Electronics on concerns about a rapid decline in global discretionary consumer spending.
Moody’s downgraded the rating outlook for LG Electronics to stable from positive.

In another development, according to a market researcher DisplaySearch, Samsung Electronics grabbed the top spot in the North American market for flat-panel TVs in the fourth quarter of last year. It was said that Samsung secured a 20.4 percent market share, up 1.1 percentage points from 19.3 percent in the previous quarter.

Other significant gainers include oil stock SK (up 2.86%), steel maker POSCO (up 2.32%) and shipbuilder Samsung Heavy Industries (up 4.06%). However, S-Oil dropped 0.68%, KEPCO declined 1.07% and Asiana Air Line slipped 0.26%.

The New Zealand market closed marginally higher amid a firm trend in the other Asian markets and a 92% fall in second-quarter profit by Telecom. The benchmark NZX-50 index finished at 2,751, up 0.62 points or 0.02%.

Despite a sharp fall in net profit, Telecom lost only 1.13% as the company kept its guidance of adjusted group net profit unchanged at $460 million to $500 million for the full year.

On the other hand, Fletcher Building, which reported a 27% fall in its profit on Thursday surged up 5.42%.

Auckland International Airport rose 0.53% after funds associated with Australia’s Macquarie Group, including Brook Asset Management, disclosed that they held a 5.01% stake in the company.

New Zealand Refining extended its downtrend and shed 0.28% on reports that Europe’s largest oil company, Royal Dutch Shell Plc, is reviewing its investments in New Zealand.

After losing more than 5% on Thursday, Fisher & Paykel Appliances shed a further 1.96% on falling consumer demand due to the global slowdown.

Among other notable stocks, Steel and Tube gained 1.61%, Warehouse Group advanced 1.16% and energy stocks Vector and TrustPower added 2.75% and 0.39% respectively, while jeweler Michael Hill tumbled 3.77%, Contact Energy fell 2.38%, Pumpkin Patch declined 1.10%, Sky City drifted down 2.01%, Hallenstein Glasson moved down 0.90% and Nuplex shed 0.41%.

In economic news, the Real Estate Institute of New Zealand, or REINZ, said house sales in January was the lowest since 1992. The number of home sales nationwide was 3,706 in January, significantly less than 5,186 recorded in the same period of 2008 and 4,302 sold in December. REINZ said the very limited turnover was of greater concern than prices.

Retail sales in New Zealand were down 1.0 percent on month in December, Statistics New Zealand said on Friday. That was lower than analyst expectations that had called for a 0.7 percent monthly decline after a flat reading in November

Among the other markets in the region, China’s Shanghai Composite index rose 3.23%, Hong Kong’s Hang Seng index gained 2.47%, Singapore’s STI Straits Times index added 1.23% and Taiwan’s TWII Weighed index advanced 2.82%.

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