Asia stocks climb on oil drop

Asia stocks climb on oil drop
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First Published: Mon, Dec 08 2008. 08 32 AM IST
Updated: Mon, Dec 08 2008. 08 32 AM IST
Hong Kong: Asia stock markets rose on Monday, with investors taking heart from a rescue plan for US automakers and hopes that the sharp drop in oil prices will ease some of the pain for households facing mounting layoffs.
Oil prices rose more than a dollar, but the plunge to a four-year low near $40 a barrel is providing some relief to the bleak landscape of tightening credit and job losses that are hitting consumers around world. Shares of oil producers fell, with Nippon Oil losing 5%.
The dollar slipped as stocks posted gains despite Friday’s dismal US jobs report showing 533,000 jobs were lost in November, the most in 34 years and one of the biggest drops ever in the government data.
But a late rally on Wall Street on Friday, led by retail shares, suggested some investors believe the worst may be over after the plunge in stocks this year and a rush to safe-have bonds that has driven benchmark US Treasury yields to half-century lows.
The MSCI index of Asia-Pacific stocks outside Japan rose 4.3% but remains down 57% as 2008 comes to a close, what would be by far the biggest yearly slide in its 20-year history.
But in a sign that investors are regaining some resolve to put money to work, data from EPFR Global showed Asia ex-Japan funds recording a third straight week of inflows in the week through last Wednesday.
Japan’s Nikkei average climbed 2.6% on gains in domestic shares after the US S&P 500 rose 3.7% on Friday. For the year, the Nikkei has tumbled 48% and the S&P 40%.
More rescue packages
Around the world, policymakers kept up their efforts to try and revive their economies.
US President-elect Barack Obama said over the weekend that he plans the biggest increase in infrastructure investment since the 1950s with the goal of creating at least 2.5 million jobs.
India launched $4 billion of extra spending to support the economy, while Xinhua news agency reported that Chinese economic leaders were meeting this week on measures to keep growth above 8%.
Also over the weekend, the White House and congressional negotiators sought to resolve the remaining difficulties over an emergency rescue for the struggling US auto industry.
Many assets have shuffled sideways in the past several weeks despite the relentless array of bleak news, giving some analysts reasons to think the worst may be over after central banks slashed interest rates and authorities put together spending packages to revive growth.
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First Published: Mon, Dec 08 2008. 08 32 AM IST
More Topics: Markets | Global | Asia | Financial Crisis | Oil |