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Asian markets rise amid China stimulus hopes

Asian markets rise amid China stimulus hopes
AP
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First Published: Wed, Mar 04 2009. 11 22 AM IST
Updated: Wed, Mar 04 2009. 11 22 AM IST
Hong Kong: Asian stock markets recovered modestly on Wednesday as hopes China would expand measures to revive its economy countered growing signs of economic decay in the US and other major countries.
The upward move followed heavy selling over the last two days and bucked a fifth-straight day of declines on Wall Street.
Chinese shares led the region’s advance on speculation the country’s leaders would unveil new initiatives to bolster the world’s third-largest economy, its growth now sputtering, at a legislative meeting that opens on Thursday. That gave a boost to other Asian markets, including Japan and Hong Kong.
Also helping sentiment were figures that Chinese manufacturing, while contracting again in February, did so at a slower rate than the previous month.
For many investors, the news fed hopes that Chinese demand and growth can help bring about a quicker end to worst global slowdown in decades.
Optimism over China helped offset more economic gloom elsewhere, this time in Australia, whose economy shrank 0.5% in the last quarter of 2008. The contraction, which surprised economists, was the country’s first in almost eight years.
Despite the gains, trade was listless, and analysts were bracing for more selling that could lead Asian benchmarks to test lows reached last year at the height of the credit crisis.
“There are still too many uncertainties,” said Peter Lai, investment manager at DBS Vickers in Hong Kong. “The news around the world is still bad and investors are still pessimistic. People are waiting for good news, but no one knows when that’s coming.”
In Japan, the Nikkei 225 stock average was up 85.41 points, 1.2%, to 7,315.13, while Hong Kong’s Hang Seng added 80.38, or 0.7%, to 12,114.26. South Korea’s Kospi jumped 3.6% to 1,062.18.
In mainland China, Shanghai’s index advanced 74.82, or 3.6%, to 2,145.56.
Overnight in the US, Wall Street fluctuated throughout the day before closing down after Federal Reserve chairman Ben Bernanke said economic recovery depends on the government’s ability to stabilize weak financial markets.
Investors were also depressed by new figures showing US auto sales hovered near historic lows last month.
The Dow fell 37.27, or 0.6%, to 6,726.02, its lowest close since 21 April 1997. The index is now down more than 52% from its record of 14,164.53 set in October 2007.
Broader stock indicators also fell. The S&P 500 index slid 4.49, or 0.6%, to 696.33.
US futures pointed to a modestly higher open Wednesday. Dow futures rose 61, or 0.9%, at 6,730 and S&P500 futures gained 7.6, or 1.1%, to 697.10.
Oil prices weakened in Asian trade, with benchmark crude for April delivery down 26 cents to $41.39 a barrel by midday in Singapore on the New York Mercantile Exchange. The contract rose $1.50 to settle at $41.65 overnight.
In currencies, the dollar was little changed at 98.34 yen compared to 98.43 yen. The euro fell to $1.2493.
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First Published: Wed, Mar 04 2009. 11 22 AM IST
More Topics: Markets | Global | Asia | Stocks | Nikkei |