Stocks across most of Asia enjoyed strong gains on Thursday after reports that China's central bank has injected record amounts of liquidity into the banking system.

Stock markets in Hong Kong, Shanghai and Tokyo registered gains on speculation that the People's Bank of China injected a net 365bn yuan this week into the Chinese banking system to boost markets ahead of next week's Golden Week holidays.

The benchmark Nikkei 225 index closed up 43 points at 8,949 in Tokyo although renewed concern about the Eurozone debt crisis crimped otherwise healthy buyer appetite. The Nikkei fell 2% in the previous session as a host of companies went ex-dividend.

The Hang Seng rallied 234 points or 1.4% at 20,762 in Hong Kong.

Banks carved out some of the day's biggest gain with shares of Industrial & Commercial Bank of China up 2.4%, China Construction Bank climbed 1.5% while Bank of China gained 0.7%.

Property stocks also spearheaded gains with shares of Henderson Land up 2.4% and Sun Hung Kai Properties rising 1.3%.

Energy stocks were also in demand with Cnooc adding 1.2% as oil prices recovered to $90.19 a barrel.

Japanese companies with strong exposure to China benefited from strong gains in Hong Kong and mainland China. Construction machinery firm Komatsu gained 2.4% while Fanuc recovered from earlier losses to mark a 0.7% advance.

Markets gains were tempered as focus returned to Europe and in particular Spain as the government prepares to announce its 2013 budget. So far, Spain has refrained from requesting financial aid.

Fashion retailer Esprit traded negatively again, down 3.5% in late trading, after its profit missed analysts' estimates.



CJ

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