Asian stocks started the new quarter with more gains after an impressive performance in March on expectations the frail global economy is about to bottom out and hopes the financial system was on the mend.
However, the safe-haven yen also rose on concerns about the fate of General Motors Corp (GM.N) and Chrysler, in a possible sign that more bad news could spur investors to ditch riskier assets just as quickly as they piled in on March.
Oil prices dropped more than 2 percent, dragged down by an industry report showing a larger-than-expected rise in U.S. crude stocks, while gold prices held firm.
Leaders from the G20 group of the world's biggest economies meet on Thursday with little hope they will find concrete solutions to the worst global economic crisis in decades.
Evidence of economic weakness abound. Data on Wednesday showed Japanese business confidence tumbled to a record low, while reports on Tuesday showed plunging U.S. home prices and consumer confidence holding at just above record lows.
Still, deep interest rate cuts by major central banks -- with the European Central Bank expected to cut its benchmark again on Thursday -- and stimulus measures are at least comforting stock markets in Asia, which enjoyed in March their best month in a decade.
"The market environment has turned fairly positive. Easier monetary policy worldwide have allowed more liquidity to flow into markets," said Kwak Joong-bo, a market analyst at Hana Daetoo Securities in Seoul.
The MSCI index of Asia-Pacific stocks outside Japan .MIAPJ0000PUS rose 0.7 percent as of 11:30 p.m. EDT, building on gains of 14.6 percent in March.
Financial shares such as National Australia Bank (NAB.AX) and KB Financial Group (105560.KS) were among the leading gainers.
Although banks in the region did not hold as many of the junk investments that hurt some of their global rivals, their shares have suffered nonetheless on concerns about the broader financial system.
"People are feeling a lot more confident about banks," said Chris Halls, a fund manager with Argo Investments Ltd in Australia.
South Korean auto makers such as Hyundai Motor (005380.KS) also surged on hopes they will gain market share at the expense of struggling U.S. rivals.
GM warned on Tuesday there was a rising chance it could file for bankruptcy by June, as Fiat SpA (FIA.MI) and Chrysler executives met in a race to complete a tie-up the U.S. government says Chrysler needs to survive.
U.S. stock futures had been hit during Asia trade on Wednesday after Bloomberg reported U.S. President Barack Obama had decided on a pre-packaged bankruptcy for GM. A senior administration official later called that report "inaccurate.
