WORLD> Asia-Pacific
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WORLD> Asia-Pacific
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Most Asian markets recover on hopes for US bailout
(Agencies)
Updated: 2008-10-01 14:56 TOKYO -- Most Asian markets bounced back Wednesday on hopes that a $700 billion bailout for the US financial system will soon win legislative approval in Washington, although doubts persisted about the long-term outlook for the global economy. Japan's Nikkei 225 index, the benchmark for Asia's biggest bourse, gained 139.74 points, or 1.24 percent, to 11,399.60 by the end of the morning session. On Tuesday, it plunged 4.1 percent to its lowest in more than three years on disappointment that the US House of Representatives had rejected the bank rescue package aimed at stabilizing the US financial system. Australia's key index jumped more than 3 percent after tumbling 4.3 percent the previous day. South Korea's market erased earlier gains to slide into negative territory.
Otherwise, regional reaction was muted because several markets were closed for holidays, including in Hong Kong, mainland China, Singapore, Indonesia, Malaysia, and the Philippines. Investors took heart from the rebound on Wall Street Tuesday amid expectations that lawmakers will salvage a $700 billion rescue plan aimed at cleaning up the bad mortgage-related debts piled up by banks and other financial institutions. US Senate leaders scheduled a vote for Wednesday on a revision of the bill that adds substantial tax cuts meant to appeal to Republicans when it goes to the House for a revote. The Dow Jones industrial average surged nearly 500 points Tuesday after plunging 777 points on Monday. European and Latin American markets also moved modestly higher on Tuesday after steep losses the previous day. But analysts warned that new worries were already starting to emerge about possible compromises that might be included in a reworked plan, raising questions about how effective it may be when implemented. "The market is already expecting the plan to pass. The question now is what's next," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Securities Co. in Tokyo. Investors are still concerned about declining US housing prices and the overall US economy -- a vital export market for Asia -- especially as they look ahead to the Christmas shopping season. Major Japanese companies, including electronics and autos, are counting on solid exports to the US to keep up profits, Fujito said. "Gloomy times are expected to continue for some time," he said, adding that a turnaround couldn't be expected at least until the latter half of next year. Elsewhere, Taiwan's stock market recovered from its 3.5 percent drop on Tuesday to rise 0.8 percent by midday. But South Korea's Kospi lost gains and was down more than 1 percent. The dollar's recent recovery, which tends to be a boost for Japanese shares, also encouraged some buying during Wednesday's Tokyo session. The dollar recovered to about 106 yen, up from about 104 yen earlier in the week. |
