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Asia stocks up 4th day, eyes on US stimulus

Asia stocks up 4th day, eyes on US stimulus
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First Published: Fri, Feb 06 2009. 10 08 AM IST
Updated: Fri, Feb 06 2009. 10 08 AM IST
Hong Kong: Asia stocks rose on Friday, with investors awaiting a vote on a massive US stimulus package, while the dollar was steady ahead of US employment data likely to reflect a deep recession.
Most other currencies and US Treasuries remained in narrow trading ranges, with the market’s attention focussed on the fate of stimulus measures and a “bad bank” scheme to separate the toxic assets plaguing financial institutions, which is expected to be announced next week.
The overwhelmingly clear direction of economic data in most countries has pointed to weakness but investors would like to see the size and scope of the next US stimulus effort to determine how quickly a recovery could take shape. The US Senate is debating a $920 billion plan but it could shrink before being passed.
“Expectations for some fresh development in the US economic measures next week, including the establishment of a ‘bad bank´ scheme, and a weaker yen are encouraging investors to pick up stocks,” said Fumiyuki Nakanishi, manager at SMBC Friend Securities in Tokyo.
Japan’s Nikkei share average rose 1.7%, with Softbank Corp stock among the biggest boosts to the index after the country’s third-largest mobile phone operator reported a 2% rise in quarterly profit and kept its forecast for the year.
The MSCI index of Asia-Pacific stocks outside Japan climbed 1.2%, tacking on a second consecutive week of gains.
Hong Kong’s Hang Seng rose 2.3%, gapping higher at the open, with index heavyweights such as HSBC and China Mobile in solid demand.
The US dollar slipped against the yen in cautious trade before key jobs data that is expected to paint an even bleaker picture of the US labour market.
The dollar slipped 0.1% to ¥91 after at one point rising above ¥92 to a one-month high overnight on hopes the government rescue plan for banks might include suspension of a key accounting rule, thawing investors’ aversion to risk.
Oil prices slipped 25 cents to $40.92 a barrel, after climbing about 70 cents overnight on hopes for US stimulus measures to take shape sooner rather than later. As it has for the last three weeks, the $40 level has been a floor for prices.
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First Published: Fri, Feb 06 2009. 10 08 AM IST
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