Asian stock markets buoyed by US stimulus hopes (1:01 p.m.)
HONG KONG — Most Asian markets extended their rally Monday, with Hong Kong’s index up almost 1 percent, as investors hoped an $827 billion US stimulus plan will resuscitate the world’s largest economy.
Stocks have advanced strongly of late on expectations the US measure, expected to pass the Senate Tuesday, will reverse the country’s deepest recession in decades by stemming massive job losses and increasing spending.
A coming overhaul of the government’s $700 billion financial bailout program, to be detailed by Treasury Secretary Timothy Geithner, also has given sentiment a lift.
Yet the markets started to fade by the afternoon - a sign the euphoria driving global equities higher recently could be short-lived. Analysts says much of the recent rise has been fueled by investors looking to capitalize on the markets’ momentum, not a fundamental shift in sentiment.
“I don’t think this rally will last,” said Desmond Tjiang, who helps manage $4 billion in Asian equities as chief investment officer at Fortis Investment Management in Hong Kong.
“There’s still bad macro news and bad corporate news that will outweigh the stimulus hopes in the near term,” he said. “After the stimulus package, what other good news can there be? I’m just very cautious.”
Japan’s Nikkei 225 stock average added 38.22, or 0.5 percent, to 8,114.84 while Hong Kong’s Hang Seng was up 92.74 points, or 0.7 percent, at 13,747.78.
Stock measures in Australia, China, Taiwan and India also gained; South Korea’s index lost ground.
Also helping markets were Friday’s gains in the US, where investors looked past abysmal news about the country’s job market and hoped it would pressure lawmakers to pass the stimulus bill.
The Dow industrials rose 217.52, or 2.7 percent, to 8,280.59 after rising 106 on Thursday. Broader stock indicators also jumped. The Standard & Poor’s 500 index rose 22.75, or 2.7 percent, to 868.60, and the Nasdaq composite index rose 45.47, or 2.9 percent, to 1,591.71.
Wall Street futures sank, suggesting US markets would shed some of last week’s gain.
Oil prices were steady in Asian trade, with light, sweet crude for March delivery exchanging hands at $40.26, up about 6 cents from earlier. The contract dropped a dollar to settle at $40.17 a barrel on the New York Mercantile Exchange overnight.
In currencies, the dollar weakened somewhat to 91.45 yen, down from 91.83. The euro traded at $1.2935, down from $1.2943. (AP)
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