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Asian shares advance to one-month high

Asian shares advance to one-month high
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First Published: Wed, Dec 10 2008. 08 50 AM IST
Updated: Wed, Dec 10 2008. 08 50 AM IST
Hong Kong: Asian stocks hit a one-month high on Wednesday on hopes for government-led help for key sectors such as technology, which encouraged risk-taking to the detriment of assets perceived as safer, such as the yen.
Oil rebounded more than $1 a barrel to above $43, after slumping nearly 4% on Tuesday, though expectations that slow global demand for commodities will pressure prices remains.
US stock futures meanwhile edged higher after officials said the White House and congressional Democrats reached an agreement in principal on a proposal for bailing out US automakers.
The advances in riskier assets came despite broader signs of caution elsewhere, with investors on Tuesday sending yields in US Treasury bills to zero as they look to safeguard their money before the end of the year.
“What we are seeing right now may be a gradual turnaround in global stocks as liquidity in financial markets is seen slowly improving, helped by the latest moves by governments,” said Jun Ji-won, a market analyst at Kiwoom.Com Securities in Seoul.
The MSCI index of Asia-Pacific stocks outside Japan rose 2% as of 7:45am (IST), after earlier hitting its highest level since 12 November. Japan’s Nikkei average gained 1.1%.
The Asia-Pacific index is now up more than 20% since hitting a five-year low on 21 November, but remains down more than half for the year.
Shares in Hynix Semiconductor rose sharply on expectations of an imminent $560 million in funding from shareholders, which analysts said would help keep the chip maker afloat for a while.
In Taiwan, struggling ProMOS, the smallest of the local three DRAM memory chip makers, was said to have applied to the government for assistance, sending shares up 6.5%.
Main indexes in South Korea, Taiwan and Hong Kong rose more than 2% each, with smaller gains seen in Australia, Singapore and Shanghai.
The gains in stocks helped pushed down the yen against the dollar and the euro. The Japanese currency has strengthened this year as investors, shunning most types of risk, unwound trades that had used the low-yielding yen.
Still, plenty of concerns remain, casting doubts on a sustained rebound in global markets.
A report on Wednesday showed Japan’s core machinery orders fell a bigger than-expected 4.4% in October, underlining a weakness in corporate capital spending in an economy mired in recession.
Companies worldwide are responding to the threat to their corporate profits by cutting jobs and slashing spending. Sony Corp shares fell 1.5% a day after the company said it aims to cut $1.1 billion in costs in its struggling electronics operations.
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First Published: Wed, Dec 10 2008. 08 50 AM IST
More Topics: Markets | Global | Asia | Stocks | Recession |