Asian stock markets rise
Tuesday, 23 September 2008
SYDNEY, Sept 22 (AFP): Asian share prices rose Monday on the back of the US government's rescue plan for the battered financial sector, with some markets also getting a sharp lift from domestic regulatory measures.
But investor caution over the move by the US Treasury to ask Congress for authority to spend US$700 billion to buy bad mortgage-related assets from financial institutions kept some rises modest, analysts said.
"Holders of equities may have to come down to earth and realise the enormity and complexity of the rescue plan-the devil is in the details and the politicians in Capital Hill may balk at the sum involved," said analysts at Singapore brokerage CIMB.
The markets getting the sharpest boost-Australia and China-both benfitted from domestic measures on top of the Wall Street rally that greeted the rescue plan.
Australian shares closed up 4.50 per cent after the corporate regulator banned all forms of short selling in a bid to curb volatility.
The market opening was delayed by an hour as the Australian Securities and Investments Commission clarified details of the ban, which will last for at least a month, but the early confusion soon gave way to a surge in prices.
Australia's restrictions go further than those announced in the markets in the US and Britain, which cover only financial stocks.
Short-selling occurs when investors sell shares they do not yet own in order to profit later from an anticipated fall in prices-often contributing to the price fall.
Some analysts said the ban could hinder market liquidity.
"After an initial two or three day surge, we risk seeing liquidity slow down dramatically," said Patrick Crabb, a senior institutional sales trader at Goldman Sachs JBWere.
Japanese shares closed up 1.42 per cent, down from early highs as markets digested the US plan to mop up Wall Street's billions of dollars of bad debt, dealers said.
Asia's largest bourse was cautious ahead of a national holiday in Japan Tuesday and uncertainty over the plan to buy the toxic mortgage-related assets of US financial institutions.
But China was another market to benefit from domestic regulatory moves, as the securities regulator announced plans for further stimulus measures to boost the stock market.
The key index closed up 7.77 per cent after the securities regulator proposed relaxing rules on share buybacks.
Analysts said the proposed change has more of a psychological than practical impact.
"There's no doubt, however, that the proposed rule demonstrates Beijing's support for China's stock markets," Huatai Securities analyst Chen Jinren said.
Gains on other markets were curbed by caution, with South Korean shares edging up just 0.31 per cent.
In Hong Kong, share prices were up 1.40 per cent at noon, while in Singapore the market was flat at midday after losing earlier gains despite the US plan.
"What is a good deal for the banks will arguably be a bad one for taxpayers so just how sustainable the rally in equity markets will be remains to be seen, as this stands to heap further economic woes on the US market, especially consumers," said CMC markets dealer Matt Buckland.`
The Shanghai Index has gained 132.39 points to 2,207.48. It had surged 9.50 per cent Friday - its biggest one-day percentage gain ever. Several major banks have jumped by the 10 per cent daily limit, including ICBC, Bank of China and Construction Bank of China.
But investor caution over the move by the US Treasury to ask Congress for authority to spend US$700 billion to buy bad mortgage-related assets from financial institutions kept some rises modest, analysts said.
"Holders of equities may have to come down to earth and realise the enormity and complexity of the rescue plan-the devil is in the details and the politicians in Capital Hill may balk at the sum involved," said analysts at Singapore brokerage CIMB.
The markets getting the sharpest boost-Australia and China-both benfitted from domestic measures on top of the Wall Street rally that greeted the rescue plan.
Australian shares closed up 4.50 per cent after the corporate regulator banned all forms of short selling in a bid to curb volatility.
The market opening was delayed by an hour as the Australian Securities and Investments Commission clarified details of the ban, which will last for at least a month, but the early confusion soon gave way to a surge in prices.
Australia's restrictions go further than those announced in the markets in the US and Britain, which cover only financial stocks.
Short-selling occurs when investors sell shares they do not yet own in order to profit later from an anticipated fall in prices-often contributing to the price fall.
Some analysts said the ban could hinder market liquidity.
"After an initial two or three day surge, we risk seeing liquidity slow down dramatically," said Patrick Crabb, a senior institutional sales trader at Goldman Sachs JBWere.
Japanese shares closed up 1.42 per cent, down from early highs as markets digested the US plan to mop up Wall Street's billions of dollars of bad debt, dealers said.
Asia's largest bourse was cautious ahead of a national holiday in Japan Tuesday and uncertainty over the plan to buy the toxic mortgage-related assets of US financial institutions.
But China was another market to benefit from domestic regulatory moves, as the securities regulator announced plans for further stimulus measures to boost the stock market.
The key index closed up 7.77 per cent after the securities regulator proposed relaxing rules on share buybacks.
Analysts said the proposed change has more of a psychological than practical impact.
"There's no doubt, however, that the proposed rule demonstrates Beijing's support for China's stock markets," Huatai Securities analyst Chen Jinren said.
Gains on other markets were curbed by caution, with South Korean shares edging up just 0.31 per cent.
In Hong Kong, share prices were up 1.40 per cent at noon, while in Singapore the market was flat at midday after losing earlier gains despite the US plan.
"What is a good deal for the banks will arguably be a bad one for taxpayers so just how sustainable the rally in equity markets will be remains to be seen, as this stands to heap further economic woes on the US market, especially consumers," said CMC markets dealer Matt Buckland.`
The Shanghai Index has gained 132.39 points to 2,207.48. It had surged 9.50 per cent Friday - its biggest one-day percentage gain ever. Several major banks have jumped by the 10 per cent daily limit, including ICBC, Bank of China and Construction Bank of China.