Asia stocks rally on Dow high, HK at 6-yr peak

SINGAPORE, Oct 5 (Reuters) Asian stocks rallied on Thursday, with Hong Kong's Hang Seng index hitting a 6-year high as investors cheered gains on Wall Street that pushed the blue-chip Dow to a record high for a second straight session.

Oil prices extended their rebound, rising above on a media report that OPEC members had agreed informally the need to cut output by 1 million barrels per day. Earlier, violence in oil exporter Nigeria had ended crude's slide.

Tokyo's Nikkei average <.n225> ended the morning session 1.64 percent higher, while the MSCI index for Asian stocks outside Japan <.msciapj> was up nearly 1 percent.

U.S. stocks had jumped as investors bet the Federal Reserve would not lift interest rates any time soon after weaker-than-expected services data calmed inflation fears.

Stocks then extended gains when the Fed said the U.S. housing market was currently in a substantial correction.

Gold, which has dropped in tandem with oil, inched up on Thursday, while the dollar slipped against the yen.

Blue-chip stocks such as Canon Inc. anchored the Nikkei's recovery after the index was hit on Wednesday amid concerns about North Korea and lower oil and commodities prices.

The Nikkei has been testing its September peak of 16,414, which was its highest since mid-May, but has been held back by caution ahead of first-half corporate earnings later this month.

The announcement by North Korea that it planned to conduct its first nuclear test also hung over the market.

''I can see investor appetite for small- to medium-cap stocks improving quickly but some concerns remain, capping the topside of the Nikkei,'' said Hiroaki Kuramochi, managing director at Bear Stearns (Japan).

Toshiba Corp. bucked the trend, sliding 5 percent on worries its Westinghouse acquisition would be a bigger burden than expected.

HONG KONG SURGE The benchmark Hang Seng <.hsi> opened at 17,897.93, its highest since July 2000, as global lender HSBC Holdings Plc.

reached an all-time peak of HK4. At 0255 GMT, the index was trading up 1.2 percent.

Taiwan stocks <.twii> rose more than 1.2 percent, bolstered by gains in technology shares such as TSMC .

''The rally on Wall Street was very positive to the local market so semiconductors outperformed,'' said Chiang Chen-sheng, manager at Masterlink Investment Advisory.

South Korean markets, hardest hit in Asia by North Korea's nuclear threat, are closed for the rest of the week.

Australia's main index <.axjo> rose about 1.2 percent, lifted by big miners and banks. The world's top miner, BHP Billiton Ltd./Plc. , gained 1.4 percent, while second-ranked Rio Tinto Ltd./Plc. added 1.6 percent.

At 0310 GMT, spot gold was up above 9 an ounce from 6.00/567.00 in Wednesday's late New York trade, where it fell nearly 2 percent. Benchmark U.S. crude had risen about 1.2 percent to .15 a barrel.

The euro slipped against the yen and the dollar on Thursday as investors took profits before a widely expected interest rate increase by the European Central Bank later in the session.

At 0250 GMT, the euro was trading at 149.45 yen while the dollar slipped to 117.73 yen from 117.90 yen in late New York trade, down from a 5-1/2-month high of 118.39 yen struck earlier in the week.

Japanese government bond futures edged higher, cheered by gains in U.S. Treasuries, as traders awaited an auction of 10-year Consumer Price Index-linked bonds for fresh clues to direction. The benchmark 10-year JGB yield was unchanged at 1.720 percent.

REUTERS BDP KP1008