UPDATE: Asian Shares Higher On US Cue; HSI Gains 3.1%

SINGAPORE -- Asian share markets were higher Friday after stronger-than-expected third quarter U.S. GDP data restored some confidence in recovery prospects. Encouraging earnings releases from Korea's Samsung Electronics and Hong Kong-listed banks ICBC and Bank of China were also lending support.

Hong Kong's Hang Seng had risen 3.1% while China's Shanghai Composite was 1.8% higher and Taiwan's main index was up 0.9%. Japan's Nikkei 225 was up 1.5% with Australia's S&P/ASX 200 up 1.5% and South Korea's Kospi Composite adding 0.5%, while New Zealand's NZX-50 was up 0.5%.

"The U.S. economy is now (unofficially) out of recession (given the third quarter gross domestic product data Thursday). But it may just come down to the simple fact that after a sell-off in many markets, investors saw it as a good level to step in,

Some analysts were doubtful the gains would last.

"The market doesn't seem convinced that today's recovery is the end of the downward correction," said IG Markets Research Analyst Ben Potter. "I wouldn't be surprised if we see further falls. The question will be what traders do in two or three days time - will they continue to buy or sell the rally? My gut feeling is that they will sell it."

Hong Kong shares were leading regional gains as the market rebounded after a sharp selloff in recent days. ICBC was up 3.3% and Bank of China was 3.2% higher after both banks reported stronger-than-expected third quarter results.

Samsung Electronics gained 2.2% in Korea after its third quarter net profit came in at KRW3.72 trillion, against a Dow Jones Newswires poll forecast of KRW3.37 trillion, with the company saying it expected the fourth quarter to be solid on seasonal demand.

But banks were lower on profit taking with KB Financial down 1.7% and Hyundai Motor down 3.9% amid worries over the impact of the end of the U.S. "cash for clunkers" program.

In Australia, materials stocks recovered after their recent declines, with Rio Tinto rising 4.1% and Woodside up 1.8%.

Tokyo shares were also led by economy-sensitive stocks such as energy, steel and trading houses. Steel maker JFE Holdings was up 3.1% while Inpex rose 1.6% and Mitsui & Co. added 1.8%. "There may be end-of-month window dressing buying, so the (Nikkei) may end above 10,000 today," said Mamoru Nakajo, manager at Phoenix Securities.

China's new Nasdaq-style board, ChiNext, made a perky debut, benefitting from strong demand for new listings among cash-rich Chinese institutions. But traders warned there could be sharp volatility ahead.

All 28 companies listing on ChiNext were higher, having all been suspended at least once for gaining more than 20% from their debut levels. "The ChiNext companies are now trading around 100 times P/Es as their IPOs were sold at an average P/E of above 50 times," said Wang Junqing at Guosen Securities.

In Taiwan, the market was being led by technology stocks. Compal was 4.3% higher, Asustek was up 1.7% and TSMC up 1.0% after all three posted healthy third quarter results.

In other markets, Singapore's Straits Times Index was 1.5% higher while Malaysia's main index was up 0.5%, Indonesian shares were up 1.5% and Philippine shares were 2.3% higher. Thai shares added 1.4%.

In currency markets the euro was nudging higher against the U.S. dollar, helped by the stock market gains. The single currency was at $1.4854, from $1.4835 late in New York, and at Y135.65 against the Japanese yen, from Y135.73. The U.S. dollar was slightly lower against the yen, at Y91.31 from Y91.51.

Traders were awaiting the outcome of the Bank Of Japan meeting, with the board expected to keep rates at an ultra-low 0.1%. The main factor for markets would be whether the board announces moves to scrap part of its unorthodox steps, including its special lending program to provide three-month funds at a 0.1% rate, outright buying of commercial paper and corporate bonds at the end of December as scheduled.

Earlier, data showed Japan's core consumer price index fell for the seventh-straight month in September, as commodities remained cheaper than a year earlier and consumers continued to limit spending.

"I believe the current price trend will remain until some time in 2011 at least because we can't expect any near-term pick up in domestic demand. And I think the BOJ has a similar view," said Shinko Research Institute economist Norio Miyagawa.

The yield on the benchmark 10-year Japanese government bond gained on the rise in equity markets. The yield briefly hit its highest intraday level in two and a half months at 1.425% and was recently up 0.5 basis point at 1.410%. Lead December futures had lost 0.10 point to 137.90.

Spot gold was steady from New York, around $1,045.80 a troy ounce.

Crude oil remained supported after rising Thursday on hopes for a U.S. economic recovery.

Mike Sanders at Sander Capital Advisors said as long as government stimulus packages continued to underpin the economy, oil would find support. "At some point the government has to slow down spending and raise interest rates...until then I would expect positive GDP reports and high oil prices." Nymex December crude was up 18 cents from New York, at $80.05 a barrel on Globex.