Asian stocks gain on improving sentiment after oil prices sink
Tuesday, 22 July 2008
HONG KONG, July 21 (AP): Asian stock markets rose Monday as sentiment improved thanks to lower crude oil prices and stronger-than-expected earnings from US banks.
In Hong Kong, the blue-chip Hang Seng Index climbed 714.18 points, or nearly 3.3 per cent, to 22,591.79. Markets in South Korea, Taiwan and Australia also were up around 3.0 per cent or more.
Japan's financial markets were closed for a public holiday.
Investor confidence got a boost after Citigroup Inc reported a second-quarter loss Friday morning that nonetheless topped analysts' projections, joining Wells Fargo & Company and JPMorgan Chase & Company in delivering better results than anticipated.
The news, which seemed to overshadow weaker results from Google Inc and some other tech giants, was a relief for investors worried about US financial companies because of the yearlong credit crisis.
At the same time crude oil prices have been in a weeklong downward spiral. Early afternoon in Singapore, light, sweet crude for August delivery was trading just below US$130 a barrel in electronic trading on the New York Mercantile Exchange-still down more than US$17 from a record hit earlier in the month above US$147 a barrel.
While problems still loomed for the US economy and other markets, the lower oil prices gave a boost to investors hungry for good news.
"Nothing has fundamentally changed in these markets. But you have to take into account oil. There's increasing confidence it will go down, and that is at least 60 per cent of the move we're seeing today," said Benjamin Collett, head of hedge fund sales trading at Daiwa Securities SMBC Company in Hong Kong.
In Hong Kong, banks helped lead the market higher. HSBC and China Construction Bank both gained more than 4.0 per cent.
Air China jumped more than 6.0 per cent due to lower oil prices.
In other markets, mainland China's Shanghai Composite Index was up nearly 1.6 per cent at 2,822.30 points, lifted partly by gains in insurance and financial issues.
In Hong Kong, the blue-chip Hang Seng Index climbed 714.18 points, or nearly 3.3 per cent, to 22,591.79. Markets in South Korea, Taiwan and Australia also were up around 3.0 per cent or more.
Japan's financial markets were closed for a public holiday.
Investor confidence got a boost after Citigroup Inc reported a second-quarter loss Friday morning that nonetheless topped analysts' projections, joining Wells Fargo & Company and JPMorgan Chase & Company in delivering better results than anticipated.
The news, which seemed to overshadow weaker results from Google Inc and some other tech giants, was a relief for investors worried about US financial companies because of the yearlong credit crisis.
At the same time crude oil prices have been in a weeklong downward spiral. Early afternoon in Singapore, light, sweet crude for August delivery was trading just below US$130 a barrel in electronic trading on the New York Mercantile Exchange-still down more than US$17 from a record hit earlier in the month above US$147 a barrel.
While problems still loomed for the US economy and other markets, the lower oil prices gave a boost to investors hungry for good news.
"Nothing has fundamentally changed in these markets. But you have to take into account oil. There's increasing confidence it will go down, and that is at least 60 per cent of the move we're seeing today," said Benjamin Collett, head of hedge fund sales trading at Daiwa Securities SMBC Company in Hong Kong.
In Hong Kong, banks helped lead the market higher. HSBC and China Construction Bank both gained more than 4.0 per cent.
Air China jumped more than 6.0 per cent due to lower oil prices.
In other markets, mainland China's Shanghai Composite Index was up nearly 1.6 per cent at 2,822.30 points, lifted partly by gains in insurance and financial issues.