Markets give cautious response to Fed plan
Thursday, 27 November 2008
TOKYO, Nov 26 (AFP): Investors in Asia reacted cautiously today to the latest plan by the US Federal Reserve to unblock credit markets, with stock markets in the region showing mixed fortunes.
The gloomy outlook for the global economy weighed on sentiment, prompting profit-taking in some markets despite the Fed's announcement that it would buy up to US$800 billion in mortgage and asset-backed securities.
"The massive injection plan by the Fed is something that should have been done by the government in the first place," said Seiichi Suzuki, a strategist at Tokai Tokyo Securities.
"This is what investors had expected in the grim situation."
Tokyo's Nikkei-225 index ended 1.30 per cent lower, weighed down by concerns about a stronger yen, and Sydney slipped 2.30 per cent. But Seoul closed up 4.70 per cent and Hong Kong's Hang Seng was 3.40 per cent higher by lunch.
Adding to jitters in Tokyo, Fitch Ratings downgraded Toyota Motor Corporation by two notches to AA, warning that in the current slump "even the strongest player" no longer deserved its top rating.
In China, hundreds of laid off workers rioted amid a dispute over severance pay, smashing offices of a toy factory and clashing with police, state press said Wednesday.
In a wobbly session on Wall Street Tuesday, the Dow Jones Industrial Average rose 0.43 per cent but the tech-heavy Nasdaq fell 0.50 per cent.
The gloomy outlook for the global economy weighed on sentiment, prompting profit-taking in some markets despite the Fed's announcement that it would buy up to US$800 billion in mortgage and asset-backed securities.
"The massive injection plan by the Fed is something that should have been done by the government in the first place," said Seiichi Suzuki, a strategist at Tokai Tokyo Securities.
"This is what investors had expected in the grim situation."
Tokyo's Nikkei-225 index ended 1.30 per cent lower, weighed down by concerns about a stronger yen, and Sydney slipped 2.30 per cent. But Seoul closed up 4.70 per cent and Hong Kong's Hang Seng was 3.40 per cent higher by lunch.
Adding to jitters in Tokyo, Fitch Ratings downgraded Toyota Motor Corporation by two notches to AA, warning that in the current slump "even the strongest player" no longer deserved its top rating.
In China, hundreds of laid off workers rioted amid a dispute over severance pay, smashing offices of a toy factory and clashing with police, state press said Wednesday.
In a wobbly session on Wall Street Tuesday, the Dow Jones Industrial Average rose 0.43 per cent but the tech-heavy Nasdaq fell 0.50 per cent.