Asian stocks up as hopes rise for China to act

Asian stock markets were mostly higher Thursday, after China's premier reportedly said that he believes the country's current economic picture leaves room for the central bank to take action to help spur growth.

Premier Wen Jiabao, during a visit to eastern China earlier this week, was quoted by the official Xinhua News Agency as saying that a stable employment environment and an easing of inflation left room for "monetary loosening."

That raised expectations that the People's Bank of China would either lower the ratio of funds that banks must hold as reserves, known as the reserve requirement ratio, or lower interest rates. The bank so far this year has lowered both twice in an effort to boost lending and spur growth.

Japan's Nikkei 225 index rose 1.5 percent to 9,056.79. Hong Kong's Hang Seng added 0.3 percent to 20,109.63, while Australia's S&P/ASX 200 added 0.6 percent to 4,308. Benchmarks in Singapore and Taiwan also rose.

South Korea's Kospi was marginally lower at 1,956.06. Benchmarks in mainland China and New Zealand also fell.

Investors also think the European Central Bank will announce new policy measures in the coming weeks. The ECB is expected to restart its bond-buying program in order to hold down borrowing rates of Italy and Spain.

"The lack of negative surprises related to the Euro crisis so far this week has allowed for a mild mood of risk appetite, as hopes for policy action in a few weeks time remains high," analysts at Credit Agricole CIB in Hong Kong wrote in a market commentary.

U.S. stocks closed mostly higher Wednesday after signs that the economic recovery is on track, albeit at a slow pace.

In a sign that of improving manufacturing after a weak spring, the Federal Reserve reported that U.S. industrial production increased last month as factories made more cars, computers and airplanes.

Also, consumer prices were unchanged in July from June, as a small drop in energy costs offset slightly higher food prices. The consumer price index hasn't changed since March, which means that inflation is in check.

Lower inflation gives the Fed more leeway to launch new programs intended to rekindle the economy. The Fed signaled at a meeting in late July that it is ready to act if growth and hiring stays weak.

The Dow Jones industrial average fell less than 0.1 percent to 13,164.78 on Wednesday. The broader Standard & Poor's 500 index gained 0.1 percent to 1,405.53, and the Nasdaq composite index lost 0.5 percent to 3,030.93.

Benchmark oil for September delivery rose 22 cents to $94.55 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 90 cents to finish at $94.33 per barrel Wednesday in New York, its highest level since mid-May.

In currencies, the euro rose to $1.2294 from $1.2290 in New York late Wednesday. The dollar rose to 79.17 from 78.88 yen.