Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Money / Update: Asia stocks recover as bargains are sought
BackBack

Update: Asia stocks recover as bargains are sought


Update: Asia stocks recover as bargains are sought

Premium

Hong Kong: Asian stocks mostly rose and government bonds cut their gains on Monday, on hopes for more government rescues of limping industries and as long-term investors scooped up cheap shares.

However, oil prices dipped to within striking distance of last week’s 22-month low after policymakers from both emerging and developed economies who met in Washington chose to leave individual governments to tend their own backyards.

Despite the small return of some risk taking, many economies are buckling under the worst financial crisis in 80 years, with a report on Monday confirming that Japan has joined a growing list of economies sliding into recessions.

“For the time being, hopes that China will be able to maintain its economic growth will lend some support to the Asian markets," said Louis Wong, research director with Phillip Securities in Hong Kong.

Hong Kong’s Hang Seng index rose 0.4% in choppy trade, with shares of China Mobile and HSBC leading the way higher.

Airline stocks such as Air China, China Eastern Airlines and China Southern Airlines rallied on hopes they will get government cash injections to cope with high costs and weak demand.

The MSCI index of Asia-Pacific stocks outside of Japan fell 1.4%, extending last week’s 9.7 drop. Year-to-date losses have piled up to around 57%.

Tokyo’s Nikkei share average recovered from early losses, rising 2.6%, as the yen fell and as long-term investors snapped up cheap stocks. Some of the stocks lifting the index, such as Takeda Pharmaceutical, were so-called defensive plays, which were expected to perform relatively well in a slowdown.

Stocks cheap but demand thin

Many analysts had not predicted a near-term improvement in market sentiment. Financial markets and economies remained locked in a vicious circle, with weakness in one affecting the other.

Equity capital flows into developed markets over the last month were at near record lows, according to State Street Global Markets analysts. Savage selling in global stock markets has made prices very cheap but investors have not judged the coast clear enough to buy wholesale yet.

The yen fell against the euro and the US dollar after a report showed Japan’s gross domestic product shrank by 0.1% in the July-to-September period and government officials said the situation could worsen further.

However, with the process of widespread risk reduction still very much intact, dealers did not expect the yen to stay down for long.

The US dollar rose 0.4% to 97.46 yen, and the euro climbed 0.2% to 122.48 yen.

US Treasuries pared earlier gains as equity markets rebounded and US stock futures flipped to positive on the day. The benchmark 10-year note was unchanged, with a yield of 3.73%.

US light crude for December delivery fell about $1 to $56.06 a barrel, near the $54.67 a barrel low it hit on Thursday, its weakest since January 2007.

The Group of 20 world leaders agreed on Saturday to a raft of fiscal and monetary steps to rescue the global economy, but it was left to individual governments to tailor their response to their particular circumstances.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 17 Nov 2008, 11:17 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App