Asian stock markets rallied to two-month highs on Wednesday 2 March with China's Shanghai Composite Index trading higher by 3.08% at 2,817.29 at 5.43am GMT. This followed a positive close overnight on Wall Street and the Footsie after the US released positive economic data.

Australia and Canada too contributed partly after releasing positive GDP data. China rallied despite Moody's cutting its credit rating outlook from stable to negative.

The Institute for Supply Management's (ISM) index of US factories increased for the month of February, indicating growth in the American manufacturing sector. This marked a second continuous month of growth after declining since late 2014. Apart from this, US construction data indicated that spending in the sector increased to its highest levels since October 2007.

Stefan Worrall, director of Japan equity sales at Credit Suisse said: "Following the selloff and the fears of recession that emerged early in the new year, people pulled back aggressively from their previous expectations about how a rate hike from the Fed might unfold. Suddenly some of this lost confidence has been restored as we've seen a lot of recent economic data from the US beating expectations."

Indices in the rest of Asia traded as follows on 2 March at 5.54am GMT:

Hong KongHang Seng Index19,993.55Up3.02%
JapanNikkei 22516,772.45Up4.27%
South KoreaKOSPI1,949.22Up1.70%
IndiaCNX Nifty7,358.75Up1.89%
AustraliaS&P/ASX 2005,021.20Up2.01%

Meanwhile, overnight, the Dow Jones Industrial Average closed at 16,865.08, up 2.11%, while the FTSE 100 closed higher by 0.92% at 6,152.88 on 1 March.

With regards to the future outlook on the stock markets, Geoff Lewis, Hong Kong-based senior strategist at Manulife Asset Management said: "While we remain cautious on the outlook, we don't think the global economy is going to tip into a recession. Much of the bad news is already priced into markets offering investors areas of opportunity."

Among commodities, WTI crude oil was trading 1.13% lower at $34.01 (£24.35, €31.31) a barrel, while Brent was down 0.43% at $36.65 a barrel at 6.09am GMT on 2 March.