ASIAN MARKETS GAIN AFTER US HOUSE PASSES STIMULUS BILL; EUROPE OPENS DOWN
Posted by Gilmour Poincaree on January 29, 2009
January 29, 2009 – 3:45 AM
by Stephen Wright – Associated Press
BANGKOK, Thailand – Asian markets advanced Thursday, with Hong Kong jumping 4.6 percent in a catch-up rally, as the U.S. House of Representatives approved a $819 billion stimulus bill that investors hope will help lift the American economy out of its worst crisis in decades. European markets opened lower.
Japan’s Nikkei 225 stock average rose 144.95 points, or 1.8 percent, to 8,251.24 even as new data showed that retail sales in the world’s second-largest economy sank the most in nearly four years in December.
Hong Kong’s Hang Seng leaped 575.83 points, or 4.6 percent, to 13,154.43 after being closed for three days for the Lunar New Year. Mainland China’s markets are closed all week. South Korea’s Kospi gained 0.7 percent and Australia’s main index rose 0.9 percent.
Sentiment in Asia got a boost as President Barack Obama’s massive stimulus package moved closer to becoming a reality.
The Democratic-controlled House of Representatives approved the bill Wednesday night, sending it to the Senate where debate could begin as early as Monday. Democratic leaders have pledged to have legislation ready for Obama’s signature by mid-February.
“The U.S. stimulus package has a positive psychological impact on markets globally,” said Castor Pang, an analyst at Sun Hung Kai Financial in Hong Kong.
“But there is still going to be bad news in the form of profit warnings and unemployment,” he said. “The unemployment rate is going to continue to climb, making U.S. consumers even more hesitant about spending.”
As trading got underway in Europe, major bourses fell with France’s CAC-40 off 1.1 percent, Germany’s DAX down 1 percent and Britain’s FTSE 100 slipping 1.1 percent.
U.S. stock index futures were down, suggesting Wall Street would open lower Thursday. Dow futures were down 87 points, or 1.1 percent, at 8,235 and S&P500 futures were off 8.6 points, or 1 perc(AP) — ent, at 862.90.
Financial stocks led Asia’s advance Thursday, buoyed in part by hopes of new U.S. efforts to trim bad debt and spur lending.
In Hong Kong, banking giant HSBC jumped 8.4 percent and China’s top lender, Industrial & Commercial Bank of China Ltd., or ICBC, added 5 percent.
In Tokyo, megabank Sumitomo Mitsui Financial Group soared 13 percent, Mitsubishi UFJ jumped 4.8 percent and Mizuho added 5.2 percent.
Japanese exporters such as Sony and Toshiba reported weak quarterly results after the market closed.
Sony Corp.’s net profit tumbled 95 percent in the October-December quarter, as the global slump hurt sales of its core electronics products, while Toshiba Corp. sank into the red in the third quarter and expects a loss for the full year.
Elsewhere, New Zealand’s benchmark index was up 0.8 percent after the central bank slashed its key interest rate by 1.5 percentage points to 3.5 percent to prevent the country’s recession from deepening.
Oil prices slipped below $42 a barrel as rising U.S. crude inventories offset expectations the U.S. stimulus package will revive growth and consumer demand. Light, sweet crude for March delivery was down 34 cents to $41.82 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange.
In currency trading, the dollar fell to 90.02 yen from 90.41 late Wednesday in New York, while the euro declined to $1.3044 from $1.3139.