Tokyo: Asian markets rose sharply on Tuesday as investors regained some confidence after a strong overnight showing by Wall Street and the US government’s bailout of Citigroup Inc. European markets, which had soared on Monday, opened lower.
Initial reaction in the region to the Citigroup news—which broke midday Monday in Asia—was tepid, and most benchmarks had ended the day lower. But after seeing markets in Europe and the US surge overnight, Asian investors joined in the rally.
“The rescue of Citigroup does help ease concerns,” said Singapore-based investment analyst Nicole Sze of Bank Julius Baer and Co. Ltd, which manages about $300 billion (Rs15 trillion) in assets. “Citigroup is such a crucial financial institution in the global market. The US action does fuel a return of confidence.”
In Japan, which had been on holiday on Monday, the Nikkei 225 stock average soared 413.14 points, or 5.2%, to 8,323.93.
Australia’s benchmark S&P/ASX200 index leaped 5.8% to close at 3,623.4, led by materials, energy, banks and consumer discretionary stocks.
Hong Kong’s Hang Seng index rose 3.4% to 12,878.60, and the Philippines’ main index jumped more than 6%. Among major markets, mainland China, Singapore and India fell.
Chinese stocks have rolled back since rallying earlier this month on news of a multibillion dollar government economic stimulus package. Adding to concerns, the World Bank on Tuesday cut its 2009 growth forecast for China from 9.2% to 7.5%—the lowest rate in 18 years.
“Sell-offs appeared after speculation about the stimulus news was over,” said Zhou Lin, an analyst for Huatai Securities. “Stocks that gained most in the previous sessions were also the biggest losers today.”
Jeremiah Marquez in Hong Kong contributed to this story.