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Asia stocks gain, yen up as caution lingers

Asia stocks gain, yen up as caution lingers
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First Published: Tue, Dec 09 2008. 09 03 AM IST
Updated: Tue, Dec 09 2008. 09 03 AM IST
Hong Kong: Asian stocks edged up on Tuesday to a one-month high, but gains were kept in check as hopes for big government spending to revive growth were offset by investors shying away from risk in wrapping up a brutal 2008.
US crude oil prices were little changed near $43.80 a barrel after rebounding from a four-year low last week, while safe-haven government bonds dipped slightly.
“Reports about additional government support and economic stimulus plans do help sentiment, but the economy is still in a deep slowdown, and we will probably see more grim economic data,” said Kwak Joong-bo, a market analyst at Hana Daetoo Securities in Seoul.
Global stocks bolted higher on Monday as US authorities thrashed out a rescue plan for struggling automakers and US President-elect Barack Obama said he would undertake the biggest infrastructure spending since the 1950s.
The White House reviewed a Democratic plan to bail out the automakers with $15 billion of loans.
Investors are still debating whether the sharp sell-off this year has run its course or there is worse to come as the global economy slides into a deep recession that has already claimed the three major regions: the United States, Japan and the euro zone.
Data on Tuesday showed Japan’s economy contracted at an even faster pace than originally estimated during the third quarter, showing the recession deepening and raising worries the world’s second largest economy faces its longest period of contraction ever.
Economists at Deutsche Bank forecast that global growth next year will be barely above zero.
The MSCI index of Asia-Pacific stocks outside Japan rose 0.3% and touched its highest in about a month, a day after jumping 7%.
Hopes that Chinese economic leaders meeting this week in Beijing would unveil more measures to prop up growth helped fuel the rebound.
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First Published: Tue, Dec 09 2008. 09 03 AM IST
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