Stocks rise in Asia
Tuesday, 16 December 2008
TOKYO, Dec 15 (AFP): Asian stock prices rebounded sharply today on growing hopes that the United States will step in to save its ailing Big Three automakers.
Japan's Nikkei index surged 5.21 per cent, while Seoul's KOSPI index added 4.90 per cent, after Washington suggested it would help Detroit by tapping into a US$700 billion bailout initially aimed at the financial industry.
The announcement triggered surprise gains on Wall Street, reversing earlier weakness that sent global indexes into a collective tailspin. The Dow Jones Industrial Average gained 0.75 per cent to close at 8,629.68 Friday.
Hong Kong's Hang Seng index was up nearly 3.0 per cent by late afternoon, although Shanghai pared early gains after China posted its slowest rise in industrial output in more than a decade.
Asian and European markets had plummeted Friday after the US Senate shot down a multibillion-dollar package to rescue automakers on the brink of bankruptcy as the global economy slows down.
"Tokyo plunged Friday out of fears that New York would tumble after the auto bailout bill was scrapped," said Ryoji Nagaoka, an investment information official at SMBC Friend Securities.
"Since then, relief has spread after New York rallied," he said.
But Nagaoka said investors "do not expect the Big Three will get a bailout smoothly."
"If they had a bright outlook, the index would rise more than it fell Friday. The rebound is still smaller than Friday's plunge."
US President George W. Bush said during a surprise trip to Afghanistan Monday that an agreement on how to remedy the carmakers' plight was not imminent.
"We are not quite ready," he told reporters travelling with him on Air Force One, but added: "This will not be a long process because of the urgency."
The Big Three US automakers-General Motors, Ford and Chrysler-have warned of millions of potential job losses if they collapse, which would send ripple effects through the already faltering economy.
In Tokyo, automakers' shares rebounded after severe falls Friday.
Toyota Motor Corporation closed up 9.78 per cent at 3,030 yen. Honda Motor Company rose 8.54 per cent to 2,085 yen.
The Japanese market advanced despite the grim results of a business survey showing manufacturers' sentiment had suffered the steepest drop since the 1970s.
The Tankan survey revealed confidence had tumbled to minus 24 in December from minus three in the previous quarter-anything below zero means pessimists outnumber optimists.
In Tokyo, however, thin year-end trading could keep the Nikkei volatile, analysts said.
Japan's Nikkei index surged 5.21 per cent, while Seoul's KOSPI index added 4.90 per cent, after Washington suggested it would help Detroit by tapping into a US$700 billion bailout initially aimed at the financial industry.
The announcement triggered surprise gains on Wall Street, reversing earlier weakness that sent global indexes into a collective tailspin. The Dow Jones Industrial Average gained 0.75 per cent to close at 8,629.68 Friday.
Hong Kong's Hang Seng index was up nearly 3.0 per cent by late afternoon, although Shanghai pared early gains after China posted its slowest rise in industrial output in more than a decade.
Asian and European markets had plummeted Friday after the US Senate shot down a multibillion-dollar package to rescue automakers on the brink of bankruptcy as the global economy slows down.
"Tokyo plunged Friday out of fears that New York would tumble after the auto bailout bill was scrapped," said Ryoji Nagaoka, an investment information official at SMBC Friend Securities.
"Since then, relief has spread after New York rallied," he said.
But Nagaoka said investors "do not expect the Big Three will get a bailout smoothly."
"If they had a bright outlook, the index would rise more than it fell Friday. The rebound is still smaller than Friday's plunge."
US President George W. Bush said during a surprise trip to Afghanistan Monday that an agreement on how to remedy the carmakers' plight was not imminent.
"We are not quite ready," he told reporters travelling with him on Air Force One, but added: "This will not be a long process because of the urgency."
The Big Three US automakers-General Motors, Ford and Chrysler-have warned of millions of potential job losses if they collapse, which would send ripple effects through the already faltering economy.
In Tokyo, automakers' shares rebounded after severe falls Friday.
Toyota Motor Corporation closed up 9.78 per cent at 3,030 yen. Honda Motor Company rose 8.54 per cent to 2,085 yen.
The Japanese market advanced despite the grim results of a business survey showing manufacturers' sentiment had suffered the steepest drop since the 1970s.
The Tankan survey revealed confidence had tumbled to minus 24 in December from minus three in the previous quarter-anything below zero means pessimists outnumber optimists.
In Tokyo, however, thin year-end trading could keep the Nikkei volatile, analysts said.