Asian stock markets soared today after Washington announced a bailout of mortgage giants Fannie Mae and Freddie Mac - a move that could help bolster a shaky US housing market and renew global investor confidence.

Japan's benchmark Nikkei 225 stock index was up more than 430 points, or 3.6%, at 12,647.42 in early afternoon trading in Tokyo.

Seoul's Kospi index was up 4.7%, Hong Kong's Hang Seng index surged 3.7% and Singapore's Straits Times Index jumped 3.8%. Key indexes in Australia and Taiwan were also higher.

The US Treasury's decision yesterday to place the two companies, which own or guarantee about half of US mortgage debt, into a conservatorship removes a big cloud that had been weighing on global markets.

"I think what the American authorities have done, in the brief look I've had, it is the right thing,'' said Glenn Stevens, the head of Australia's central bank, at an appearance before a parliamentary committee in Melbourne.

"Their implications are likely to be positive for markets because it's a source of uncertainty close to resolution,'' he said.

The news injected life into recently listless banking names, with the Commonwealth Bank of Australia up 5.9% and National Australia Bank 7.8%.

In Tokyo, Mizuho Financial Group and Mitsubishi UFJ Financial Group both gained more than 11%.
 
Nomura Holdings jumped 9.1% following weekend reports that Japan's largest brokerage group is considering buying a stake in US investment bank Lehman Brothers.
 
Nomura has funds exceeding $US1.87 billion ($2.24 billion) for investment in US and European financial institutions and is considering Lehman as one of its investment candidates, Nomura president Kenichi Watanabe was quoted as saying by the Japanese newspaper Yomiuri.

China shares buck trend

Bucking the regional trend was China's Shanghai Composite index, which was down more than 2% on heavy losses in property developers, refiners and airlines. But major banks rose, with Bank of China up 2.3%, and Industrial & Commercial Bank of China adding 0.7%.
 
Today's gains in Asia follow a dismal trading session on Friday when concerns about the US economy and its impact on global growth sent markets tumbling across the region.

In currencies, the dollar was up at 108.72 yen early this afternoon in Asia, from its 107.72 yen late on Friday.

AP