HONG KONG (AP) -- Asian stocks advanced Friday after a report that U.S. manufacturing activity jumped last month raised hopes of a rebound in industrial production that would bolster growth in the world's biggest economy.
Investors were pleased after the Institute for Supply Management's purchasing managers' index rose much higher than expected in July. They were also optimistic ahead of key U.S. data releases expected later Friday that they hoped would add further evidence of a strengthening U.S. recovery.
"Holy smokes," economists at Singapore's DBS Bank wrote in a research note. They noted that the report comes after other recent upbeat U.S. data, including second-quarter growth that was better than expected and a surge in durable goods orders.
"Payrolls and the unemployment rate are on tap today. If these green shoots — or rocket ships in the case of the ISM — spill over to the labor market, there's going to be a party at the Fed. And on Pennsylvania Avenue. Wall Street."
Japan's Nikkei 225 index surged 2.7 percent to 14,375.10. Hong Kong's Hang Seng added 0.5 percent to 22,211.03 while in mainland China, the Shanghai Composite Index rose 0.4 percent to 2,036.61.
South Korea's Kospi was up 0.1 percent to 1,922.20 and Australia's S&P/ASX 200 climbed 0.9 percent to 5,105.90. Benchmarks in Singapore, Taiwan and New Zealand also rose. Benchmarks in the Philippines and Thailand fell.
Investors were also keeping a close eye on corporate results posted so far during earnings season to get a better idea of how, for example, the economic slowdown is playing out in China, the world's No. 2 economy. The latest sign of China's uncertain economic outlook came on Thursday, when an official Chinese survey of manufacturing activity ticked up unexpectedly though remained weak.
"Essentially, reporting season will be the test of whether or not that negative macro sentiment has really impacted companies on the ground as much as people expect," said Sam Le Cornu, a senior fund manager of Asian equities at Macquarie Funds Group.
"So far we're seeing above expectations on results, and any stock which does beat expectations, you see a rally quite aggressively," said Le Cornu.
Hong Kong conglomerate Hutchison Whampoa Ltd., controlled by billionaire Li Ka-shing, rose 4.2 percent after posting first-half profit that was up nearly a quarter over the year before.
Sony Corp. rose 0.7 percent in Tokyo after the Japanese electronics giant returned to profit in the January-June period after a loss in 2012.
On Thursday, the Dow Jones industrial average and the Standard & Poor's 500 index hit record highs, and the S&P 500 index crossed the 1,700 mark for the first time. The Dow rose 0.8 percent to close at 15,628.02. The S&P 500 index gained 1.3 percent to 1,706.87 while the Nasdaq composite index rose 1.4 percent to 3,675.74.
Benchmark crude for August delivery was up 74 cents to $108.63 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.86 to close at $107.89 a barrel on the Nymex on Thursday.
In currencies, the euro was unchanged from late Thursday at $1.3206. The dollar edged up to 99.55 Japanese yen from 99.49 yen.