Asian Stocks Hit Their Highest After Oil & Gold Retrace

Asian stocks hit to their highest in a month on Thursday as a retrace in gold and oil lifted resource shares, while an incredibly optimistic indicator for US jobs elevated hopes of a weaker US economy recession than initially expected.

The Fed Chairman had stated a congressional panel on Wednesday the US economy may fall into recession, but noted growth should pick up later this year as the impact of US interest rate cuts and other emergency steps take root.

The MSCI's measure of Asian stocks outside Japan picked up 0.6 per cent by 0241 GMT, after earlier hitting its highest level since March 6. The prospects of a US recession and the global financial crisis have dented Asian shares this year, with the MSCI index still down 12 per cent in 2007 as of the previous close.

The index rose 2.9 per cent on Wednesday after write-downs and capital raisings by global investment banks such as UBS was seen as an attempt to get a handle on the soured portfolios of subprime-related and other assets. Australian shares inched up 1.4 per cent, hitting a five-week high, encouraged by gains in heavyweight resource firms such as BHP Billiton Ltd and Woodside Petroleum.

Not all investors appeared to share the faith in the US economy. The dollar was under pressure against major currencies, trading slightly lower at $1.5672 and steady against the yen at 102.30 following Bernanke's comments.

US crude futures stayed at $104.53 a barrel a day after oil prices picked up almost $4 on the weaker dollar and on US government data showing a sharp drawdown in refined fuel stocks. The gains in oil helped gold jump to $903.30/904.10 an ounce from $898.00/898.80 in late US trade on Wednesday, still more than $100 an ounce off last month's record high of $1,030.80.