Asian stocks surged, Europe extended its gains and Wall Street was poised to rally once more Wednesday amid a growing belief that the worst of the credit crisis is over.

In Europe, share prices rose for banks such as UBS, which announced it was issuing new shares to help bolster its balance sheet after another massive write-down linked to bad U.S. mortgages. But automakers lagged on weak U.S. sales data for March, as well as a broker downgrade for Daimler.

In the U.K., the FTSE 100 rose 0.22 percent at 5,865.30, while Germany's DAX gained 0.65 percent at 6,763.77. France's CAC 40 climbed 0.68 percent to 4899.16.

Shares of UBS rose 3.27 percent, while Barclays PLC jumped 3.39 percent and Royal Bank of Scotland added 2.84 percent.

In Tokyo the Nikkei 225 index rose 4.2 percent to 13,189.4. Hong Kong's Hang Seng Index climbed 3.2 percent to 23,872.4.

Benchmark indices in Australia, Singapore, South Korea, Taiwan and the Philippines all gained more than 2 percent. And in mainland China, the Shanghai Composite Index finished 0.6 percent higher after having gained as much as 4.1 percent.

"Investors believe the credit crisis in the U.S. is over," said Francis Lun, a general manager at Fulbright Securities in Hong Kong. "They think the worst has gone."

The futures contract for the Dow Jones industrial average rose 50 points Wednesday, or 0.4 percent, to 12,677. Futures contracts for the Standard & Poor's 500 gained 5.20 points, or 0.5 percent, to 1,375.80 and Nasdaq 100 futures rose 9.8 points, or 0.6 percent to 1,867.5.

Financial stocks were among the big winners in U.S. and Asian trading after Lehman Brothers Holdings Inc. and Switzerland's UBS AG issued new shares. The news was viewed as upbeat and offset even an announcement that UBS will write down $19 billion (12 billion euros) due to additional declines in the value of its mortgage assets and other credit instruments.

In Tokyo trading, megabank Mitsubishi UFJ Financial Group soared 9.8 percent, Mizuho Financial Group gained 10 percent and Sumitomo Mitsui Financial Group jumped 9 percent.

Property company Mitsui Fudosan climbed 12 percent and Sumitomo Realty & Development gained 12 percent.

In New York Tuesday, the Dow Jones industrials climbed nearly 400 points, around 3.2 percent, to 12,654.4, and all the major U.S. stock indexes were up more than 3 percent.

Chinese financial firms led the blue chip gains in Hong Kong. Industrial & Commercial Bank of China, the nation's biggest lender by assets, soared 4.9 percent, China Construction Bank added 4.8 percent and Bank of Communications increased 6.5 percent.

Oil companies also climbed higher, with Sinopec rising 6.3 percent and CNOOC adding 3.5 percent.

Some analysts warned, though, that the rebound could be precarious.

Asian markets are still "hinged to the credit crunch problem in the U.S. and Europe," said Castor Pang, a strategist at Sun Hung Kai Financial in Hong Kong. "If the problem turns worse again, the money will leave Asia."

In currency trading, the dollar rose to 102.28 yen at midafternoon, up from 102.04 yen late Tuesday in New York. The euro dipped to $1.5597 from $1.5601.

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Associated Press writers Thomas Hogue in Bangkok and Dikky Sinn in Hong Kong contributed to this report.