Asian stock markets higher after strong US gains

Asian markets were mostly higher in light trading Thursday, as investors took heart from data showing an improving economic picture in the U.S. and signs that tensions had cooled at least temporarily on the Korean peninsula.

Oil prices hovered below $84 a barrel, consolidating gains after a rally sparked by improving U.S. economic indicators. In currencies, the dollar was lower against the yen but up against the euro.

World markets have for the most part shaken off the jitters that followed a tense standoff between North and South Korea. The two sides exchanged fire Tuesday, leaving four South Koreans dead and putting the region on edge. While some markets slumped, the effects were short-lived.

Japan's Nikkei 225 stock average rose 0.8 percent to 10,109.08 and Hong Kong's Hang Seng index added 1 percent to 23,260.11. South Korea's Kospi index gained 0.3 percent to 1,931.51.

Australia's S&P/ASX was up 0.3 percent at 4,594.9. Shares in Shanghai, Taiwan and Singapore were also higher.

"We believe the Korean markets have taken comfort from the strong commitment from the Korean authorities to provide liquidity if needed and the fact that there has been no further escalation in tensions, with statements from China and US urging calm on both sides," Bank of America Merrill Lynch said in a research note.

Elsewhere, trading remained subdued as the U.S. celebrated its Thanksgiving holiday.

"It seems to us as if Asia has gone on a Thanksgiving holiday. There's very little participation in the markets," said Tey Tze Ming, a trader at Saxo Capital Markets in Singapore.

There was an initial boost in early trading amid signs the U.S. labor market was improving, but the euphoria was short-lived, Ming said, and many stocks hit a plateau.

The U.S. government said first-time claims for unemployment benefits fell 34,000 to 407,000 last week. That was much better than the 435,000 new claims economists had expected.

Markets do not appear to be set to zoom higher in the coming months, Ming said, particularly amid signs that Europe's debt problems remained far from solved and China's government has shown no reluctance in imposing measures to cool down its economy.

"The Chinese government has signaled very clearly that they will try to cool down the domestic market, so even if the current tightening measures have this effect, they will continue," Ming said. Such measures would likely weigh down markets.

In New York overnight, the Dow Jones industrial average surged 1.4 percent, to 11,187.28, on a host of positive economic indicators. The broader Standard & Poor's 500 index gained 1.5 percent to 1,198.35.

Those gains marked a rebound from U.S. falls Tuesday that followed the Korean skirmish. Shares on Wednesday were boosted by positive data on incomes and consumer spending, raising hopes that shoppers will turn out in large numbers on Friday, the day after Thanksgiving and the start of the holiday shopping season.

Benchmark oil for January delivery was down 2 cents to $83.84 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $2.61, or 3.2 percent, to settle at $83.86 on Wednesday.

In currencies, the dollar fell slightly to 83.48 yen from 83.54 overnight in New York. The euro slipped to $1.3324 from $1.3330.