Asian stocks soar on Wall Street
Tuesday, 21 August 2007
HONG KONG, Aug 20 (Reuters): Asian stocks roared back Monday as investors jumped on board a global rally sparked by the US central bank's boldest move yet to try to ease credit fears.
Across the region shares shot higher on hopes that the worst of the recent market rout might be over after the Federal Reserve cut the lending rate it charges commercial banks in an effort to ward off a credit crunch.
Tokyo closed up 3.0 per cent with its biggest single-day points rise since June 2006, recouping more than half of Friday's 5.42 per cent plunge. Shanghai leapt 5.33 per cent to a record closing high.
US and European stocks soared Friday after the US Federal Reserve slashed the discount rate to try to calm the recent storm on world financial markets sparked by fears of a credit crunch from the sub-prime mortgage problems.
The central bank cut the rate it charges commercial banks to 5.75 per cent, saying that it wanted to restore order in financial markets that were hit by "increased uncertainty."
But markets remained nervous about possible further bad news on the fallout from rising delinquencies in US sub-prime mortgages to risky borrowers, with some analysts warning there could be more losses ahead.
Seoul closed up 5.7 per cent and Sydney jumped 4.6 per cent, while Hong Kong was 5.9 per cent higher after China announced a limited amount of investors would be allowed to buy into the territory's market.
Singapore, helped by an improved growth forecast, rallied 6.12 per cent and Mumbai firmed 2.02 per cent.
Elsewhere in the region, Jakarta jumped a massive 7.0 per cent as Bangkok rose 4.43 per cent after voters approved a military backed constitution.
Kuala Lumpur gained 4.4 per cent and Wellington closed up more than 2.2 per cent. Manila was shut for a national holiday.
Tokyo also gained a boost from the yen's retreat, which soothed investor fears about exporter earnings, dealers said.
The dollar traded at 114.67 yen in Tokyo afternoon trade, up from the mid-112 yen range when the Tokyo stock market closed Friday.
Despite the rebound, analysts warned stocks could struggle to sustain their upward momentum.
"Share prices are likely to be slow to resume their upward trend," said Ryuta Otsuka, a strategist at Toyo Securities.
"There are things investors need to assess carefully, such as the prospects for the US economy and the impact on Japanese companies' earnings of the credit market problems," he said.
Across the region shares shot higher on hopes that the worst of the recent market rout might be over after the Federal Reserve cut the lending rate it charges commercial banks in an effort to ward off a credit crunch.
Tokyo closed up 3.0 per cent with its biggest single-day points rise since June 2006, recouping more than half of Friday's 5.42 per cent plunge. Shanghai leapt 5.33 per cent to a record closing high.
US and European stocks soared Friday after the US Federal Reserve slashed the discount rate to try to calm the recent storm on world financial markets sparked by fears of a credit crunch from the sub-prime mortgage problems.
The central bank cut the rate it charges commercial banks to 5.75 per cent, saying that it wanted to restore order in financial markets that were hit by "increased uncertainty."
But markets remained nervous about possible further bad news on the fallout from rising delinquencies in US sub-prime mortgages to risky borrowers, with some analysts warning there could be more losses ahead.
Seoul closed up 5.7 per cent and Sydney jumped 4.6 per cent, while Hong Kong was 5.9 per cent higher after China announced a limited amount of investors would be allowed to buy into the territory's market.
Singapore, helped by an improved growth forecast, rallied 6.12 per cent and Mumbai firmed 2.02 per cent.
Elsewhere in the region, Jakarta jumped a massive 7.0 per cent as Bangkok rose 4.43 per cent after voters approved a military backed constitution.
Kuala Lumpur gained 4.4 per cent and Wellington closed up more than 2.2 per cent. Manila was shut for a national holiday.
Tokyo also gained a boost from the yen's retreat, which soothed investor fears about exporter earnings, dealers said.
The dollar traded at 114.67 yen in Tokyo afternoon trade, up from the mid-112 yen range when the Tokyo stock market closed Friday.
Despite the rebound, analysts warned stocks could struggle to sustain their upward momentum.
"Share prices are likely to be slow to resume their upward trend," said Ryuta Otsuka, a strategist at Toyo Securities.
"There are things investors need to assess carefully, such as the prospects for the US economy and the impact on Japanese companies' earnings of the credit market problems," he said.