Nov 25, 2008 12:50 am US/Eastern
Asian Stock Markets Rise After Wall Street Rally
TOKYO (AP) ―
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A businessman walks past a share prices board in Tokyo on Nov. 4, 2008. (File)
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Asian markets rose Tuesday as investors regained some confidence on Wall Street's second straight day of strong gains, spurred by a U.S. government bailout of banking giant Citigroup.
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 U.S. surge overnight, Asian investors joined in the rally.
Gains faded somewhat as trading progressed, reflecting the persistent concerns investors have about the length and depth of slumps in the U.S. — a vital export market — and broader global economy.
"Most investors are still cautious on the U.S. economy," said Castor Pang, an analyst at Sun Hung Kai Financial in Hong Kong, adding that Tuesday's gains were likely a temporary rebound.
In Japan, which had been on holiday Monday, the Nikkei 225 stock average was up 3.4 percent at 8,179.00 after surging more than 4 percent earlier.
Hong Kong's Hang Seng index, up 4.6 percent in early trading, rose 3.3 percent by midday at 12,873.80. South Korea's Kospi, which had fallen 3.4 percent Monday, rose 1.5 percent, while Australia's key index was up 3.7 percent.
Wall Street and European markets surged Monday on news that the U.S. government will take a $20 billion stake in Citigroup and guarantee hundreds of billions of dollars in risky assets. The Dow Jones industrials soared 396.97 points, or 4.93 percent, to 8,443.39 Monday — the first two-day advance since Oct. 31.
Britain's FTSE 100 index jumped 9.8 percent to 4,152.96, Germany's DAX soared 10.3 percent to 4,554.33 and France's CAC-40 gained 10.1 percent at 3,172.11.
Japanese officials in Tokyo hailed Washington's move.
Economy Minister Kaoru Yosano called the plan a "courageous decision" to save the massive global banking group, noting that the world's economy could be affected by Citigroup's fate, according to Kyodo news agency.
All three of Japan's "megabanks" climbed, with Mitsubishi UFJ Financial Group Inc. up 3.5 percent, Mizuho Financial Group Inc. soaring 9.1 percent, and Sumitomo Mitsui Financial Group Inc. 8.2 percent higher.
South Korea's KB Financial Group, the holding company for top lender Kookmin Bank, rose 9 percent, after falling the previous day.
Wall Street's gains also drove commodity markets higher as oil prices jumped 9 percent Monday, though they slipped back a bit in Asian trading Tuesday. Commodity shares in Australia gained as a result, with BHP Billiton Ltd., the world's largest mining company, soaring 14.7 percent.
After jumping $4.57 overnight, light, sweet crude for January delivery was down 61 cents to $53.89 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.
In currencies, the dollar fell to 96.43 yen from 96.88 yen late Monday. The euro also slid to $1.2837 from $1.2925.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
Timeline: U.S. Credit Crunch & Financial Failures
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