HONG KONG: Asian markets rose Thursday on the back of another rally on Wall Street despite more miserable news from the United States showing the world's biggest economy is in for a deep recession.

Data released Wednesday showed the biggest fall in US private sector jobs for six years, while activity in the service industry fell to its lowest level in at least a decade.

Investors were also waiting on the outcome of a two-day meeting in Washington at which the heads of the Big Three auto companies are pleading for a multi-billion-dollar bailout to avert a collapse of the industry.

Japan's Nikkei stock index was up 0.62 per cent by noon, Hong Kong was 0.7 per cent higher and South Korea put on 1.9 per cent.

Sydney was two per cent up following the release of figures showing a record surplus of A$2.95 billion (US$1.94 billion) in October due to its weakening currency and a jump in exports.

Shanghai added 3.46 per cent by noon following news that the country's sovereign wealth fund had built up its stakes in three state-run banks.

The rises came after the Dow Jones Industrial Average rose 2.05 per cent and the Nasdaq composite added 2.94 per cent, while the Standard & Poor's 500 advanced 2.58 per cent.

Those rises came despite an ADP National Employment Report showing the US private sector lost 250,000 jobs last month, the largest fall since 2002.

Separately, consultancy Challenger, Gray & Christmas said layoffs announced by American employers in November rose to 181,671 as job cuts for the year officially surpassed one million for the first time since 2005.

Meanwhile the Institute for Supply Management, a trade group of purchasing executives, said its non-manufacturing index fell to 37.3 per cent in November, down from 44.4 per cent in October, the lowest reading since the survey began in 1997.

The Labor Department was to release its weekly jobless claims report Thursday and overall employment data Friday and analysts say these could show 325,000 jobs were lost in November while the jobless rate rose to 6.8 per cent from 6.5 per cent in October.

However, dealers in New York were looking at the good news, with a survey from the US Mortgage Bankers Association showing strong demand for home loans. The report revealed a 112.1 per cent increase on a seasonally adjusted basis from a week earlier.

And a report by the research firm comScore showed online sales rose 15 per cent on the shopping day known as Cyber Monday.

But eyes will be on Capitol Hill Thursday and Friday, where the heads of General Motors, Chrysler and Ford Motor Company are to present their case for a massive government handout to save them from bankruptcy.

GM said it needs up to US$18 billion in emergency loans, while Ford said US$9 billion and Chrysler US$7 billion.

Figures from Japan's finance ministry revealed more grim news from the world's second biggest economy, which is officially in recession. Data showed companies there slashed investment in new factories and equipment by 13 per cent last month, the sharpest drop since comparable records began in 2002.

And Japan's top brokerage Nomura Holdings said it was to cut 1,000 jobs in London after it took over the operations there of failed Wall Street giant Lehman Brothers.

US Treasury Secretary Henry Paulson, in Beijing for bilateral talks with Chinese officials, said he hoped the Asian giant would use its financial muscle to help the global economy out of its worst crisis since the Great Depression.

The yen, considered a safe haven in times of financial trouble, rose on Thursday. The dollar dropped to 93.14 yen in Tokyo from 93.29 in New York late Wednesday and the euro slipped to 118.19 yen from 118.55.

And oil slipped to below US$46 a barrel amid concerns that demand for energy will decline as the economic picture worsens.

There was also a warning from South Korea's finance ministry that its economy faced further woes as it released data showing exports dropped more than 18 per cent year-on-year in November, the largest fall in percentage terms since December 2001.

London's FTSE 100 index closed up 1.14 per cent, the Paris CAC 40 gained 0.44 per cent and Frankfurt's DAX rose 0.78 per cent.

Dealers said investors were hoping the European Central Bank and the Bank of England would both slash interest rates further Thursday.

In other markets, Brazil's Bovespa added 0.85 per cent but the Canadian S&P/TSX lost 0.37 per cent.

- AFP/yb