By STEPHEN WRIGHT, AP Business Writer Stephen Wright, Ap Business Writer

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12 mins ago

BANGKOK – Asian stocks rose modestly Wednesday as investors vacillated between hopes the worst of the global recession is over and worries the three-month market rally will evaporate.

Data from Australia and the U.S. provided more evidence that economies are beginning to heal but was still short of the definitive confirmation of recovery that investors are hoping for.

Pending home sales in the U.S. recorded their biggest jump in nearly eight years in April while Australia’s economy unexpectedly grew in the first quarter — edging up 0.4 percent — as a government stimulus package boosted consumer spending.

With returns on bonds at low levels, money has been pouring into Asian stocks in pursuit of bigger investment profits, driving major indexes up 30 percent or more since early March.

But some analysts say the big gains in markets are out of step with reality: the faint pulse being felt in major economies isn’t enough to remove them from life support.

Friday’s jobs report could help cement or break optimism that a recovery is forming.

“The major reason for the rebound is that a lot of liquidity is flowing into Asia’s markets but some new sign of economic crisis could see that money flow out again,” said Castor Pang, analyst at Sun Hung Kai Financial in Hong Kong. “The momentum is still strong but some investors are cautious.”

In Japan, the Nikkei 225 stock average was up 42.80 points, or 0.5 percent, at 9,748.27, while Hong Kong’s Hang Seng gained 419,69, or 2.3 percent, to 18,808.77 on optimism that China will rebound from its economic slowdown. South Korea’s Kospi gained 0.3 percent to 1,415.93.

Australia’s index gained 1.3 percent and China’s Shanghai market climbed 1.1 percent. Taiwan stocks fell 1.1 percent.

Overnight, Wall Street rose on the housing report but gains were tempered by losses in financial stocks as several banks said they would sell shares to raise capital.

The Dow Jones industrial average rose 19.43, or 0.2 percent, to 8,740.87 and the broader Standard & Poor’s 500 index rose 1.87, or 0.2 percent, to 944.74.

Stock futures pointed to modest gains Wednesday on Wall Street. Dow futures rose 22, or 0.3 percent, to 8,736 and S&P futures gained 1.4, or 0.2 percent, to 944.

Crude oil prices hovered above $68 a barrel near a seven-month high as investors sought a safe haven in commodities from a weaker U.S. dollar and inflation. Benchmark crude for July delivery was up 8 cents to $68.61 a barrel by early afternoon in Singapore in electronic trading on the New York Mercantile Exchange.

Among currencies, the dollar was trading at 95.62 yen from 95.45 yen while the euro kept climbing against the dollar, rising to $1.4315 from $1.4293 late Tuesday in New York.