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Asian shares edge up; conflicting signs on risk

Asian shares edge up; conflicting signs on risk
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First Published: Thu, Dec 11 2008. 12 54 PM IST
Updated: Thu, Dec 11 2008. 12 54 PM IST
Hong Kong: Asian shares gained on Thursday as aggressive rate cuts and government actions to revive economic growth improved confidence, but plenty of other worrisome signals remained, supporting government bonds.
Oil extended the prior day’s rally on signs Saudi Arabia had slashed supplies to customers, while the US dollar, which had recently attracted strong demand due to its safe-haven perception, fell to a one-month low against the euro.
Central banks are acting aggressively, helping ease some concerns about the global economy, especially as inflation drops worldwide. China on Thursday said the consumer price index fell to a 22-month low.
South Korea on Thursday cut interest rates by 1 percentage point, helping Seoul shares and the won currency hit around one-month highs. But plenty of uncertainties still remain, and not all investors were willing to add on risk.
Expectations for sharply slower growth through 2009 and renewed uncertainty about a US auto bailout kept regional bonds firm and European shares were seen inching lower.
The MSCI index for Asia-Pacific stocks outside Japan advanced 0.4% as building on the previous day rally of 4.5%.
Japan’s Nikkei average rose 0.7% to mark its fourth consecutive daily gain.
However, some major indexes in Asia such as in Shanghai and Australia fell, hit by a mixture of concerns about the global economy and uncertainty about whether the US Senate will now approve a rescue for auto makers after the plan cleared the lower house of the US Congress.
Corporate news has added to worries about global growth. Major companies worldwide such as Rio Tinto are announcing steep job cuts as they seek ways to cope with a crisis of a magnitude not seen in decades.
Taiwan ended flat, but South Korea’s KOSPI gained 0.8% and the won currency surged 2.6% against the dollar, after the central bank cut its key interest rate by an unprecedented 100 basis points to a record low 3%.
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First Published: Thu, Dec 11 2008. 12 54 PM IST
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