HONG KONG: Asian stock markets and oil prices extended their advance Wednesday amid renewed faith a recovery in the global economy was sustainable.

Major benchmarks were about 1 percent higher or more, while the dollar was little changed against the yen and euro after declining the previous session.

Investors poured money into riskier assets like stocks and commodities throughout the region, as Tuesday's news that Australia was the first major country to raise interest rates since the onset of the financial crisis continued to bolster confidence in the world economy. It was a signal that policymakers believe the country's economy is strong enough to withstand higher borrowing costs, and fueled optimism that other economies were in better than shape than expected.

"It provided a psychological boost to the market as a seal of approval on the global recovery story," Dariusz Kowalczyk, chief Investment strategist for SJS Markets in Hong Kong, wrote in a note.

At the same time, he said Australia's decision was somewhat surprising coming just weeks after the leaders of the Group of 20 major countries agreed to continue with government spending programs and low interest rates to nurture a global rebound.

While no developed country would follow in Australia's footsteps anytime soon, South Korea, where the economy has held up relatively well and the central bank has already said it might raise rates in response to rising asset prices, could be next, he said.

In Japan, the Nikkei 225 stock average gained 120.84 points, or 1.3 percent, to 9,812.64 and Hong Kong's Hang Seng advanced 386.71 points, or 1.9 percent, to 21,198.24.

Australia's index jumped 2.4 percent, South Korea's Kospi edged higher by 0.5 percent to 1,606.26, and Singapore's index gained 1.1 percent. Taiwan's benchmark was up 0.4 percent. Mainland China markets are closed for a weeklong holiday and reopen Friday.

In the U.S. overnight, the Dow rose 131.50, or 1.4 percent, to 9,731.25 after rising 112 points Monday.

The Standard & Poor's 500 index rose 14.26, or 1.4 percent, to 1,054.72, while the Nasdaq composite index rose 35.42, or 1.7 percent, to 2,103.57.

Oil prices were higher, helped by the weak dollar and optimism about that a global economic recovery would boost demand for crude. Benchmark crude for November delivery was changing hands at $71.55 in Asia, up 67 cents from the prior session. The contract rose 47 cents overnight.

The dollar wallowed at 88.74 yen from 88.76 yen. The euro traded at $1.4705 from $1.4722.