Markets higher as U.S. rate worries ease

HONG KONG, July 20 (Reuters) Asian stock markets rallied on Thursday with both Tokyo and Seoul rising more than 2 percent as worries about higher U.S. interest rates faded following comments from Federal Reserve Chairman Ben Bernanke.

Bernanke told the Senate Banking Committee that while the U.S. economy still faced inflation risks, cooler growth should curb price pressures over time.

His comments, along with strong earnings results from the likes of JPMorgan Chase&Co, sparked a rally on Wall Street.

Lower oil prices also boost sentiment, with U.S. crude trading at .95 a barrel, well below the record high of .40 struck last Friday.

At 0025 GMT, Tokyo stocks had jumped 2.13 percent as Canon Inc.

gained 2.86 percent and electronics components maker Kyocera rose 3.41 percent.

Even chip-related stocks such as chip tester maker Advantest Corp. advanced 1.25 percent, despite sector bellwether Intel Corp.

posting a sharply lower second quarter profit and disappointing sales forecast.

In South Korea, Samsung Electronics added 1.9 percent, top lender Kookmin Bank soared 4.79 percent while steel maker POSCO climbed 3.33 percent, helping drive the KOSPI up 2.35 percent.

''Concerns over higher interest rates in the U.S. were dissolved thanks to Bernanke and lower oil prices,'' said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities.

Hynix Semiconductor advanced 1.97 percent after the world's second-biggest memory chip maker reported a 36 percent rise in quarterly profit. See Australian stocks were also firmer with gains of over 1 percent for all the big four local banks and strength in the major miners such as BHP Billiton propelling the market up 1.70 percent.

Macquarie Bank edged up 0.81 percent after the investment bank said it had a strong first quarter and expected fiscal 2007 profit to be higher. See U.S. blue chip stocks rose 1.96 percent on Wednesday while the tech-heavy Nasdaq Composite Index put on 1.83 percent.

Reuters YA GC0700