Asia stocks rally continues on policy hopes
Asian stocks rose for a fifth straight day on Monday on hopes policy efforts to dampen the impact of the financial crisis would ultimately take hold, though data still painted an ugly picture of the global economy.
China frees Hong Kong journalist ahead of OlympicsInvestors were also cautiously shopping for bargains after shares and commodity prices globally in October posted their biggest decline ever on fears of a deep recession in the world economy.
Major European stock markets were expected to open up as much as 2.5 percent, according to financial bookmakers, with momentum seen carrying over from Asia.
Expectations of more interest rate cuts this week from Australia, Britain and the euro zone following last week's reductions from China, India, Japan and the United States, among others, has at the least slowed the panicked selling of risky assets that dominated most of October.
"Some weeks back, what were needed were coordinated global policy responses. Though there have been a few wobbles and maybe less coordination than ideal, it is difficult not to look back and consider that we are moving in the right direction," said Patrick Bennett, Asia foreign exchange and rates strategist with Societe Generale in Hong Kong.
"For Asia, a renewed focus on the real economy cannot ignore the fact of slower global growth and resultant slower external demand," he said in a note.
The scramble to exit equities, commodities and local currency emerging market bonds in October had poured money into yen, U.S. Treasuries and the U.S. dollar, which had its largest monthly in gain in 17 years. These trends were not expected to reverse any time soon, but investors were taking advantage of the relative calm in markets to balance their portfolios.
The MSCI index of stocks in the Asia-Pacific region outside Japan rose 5.9 percent, up for a fifth consecutive session after having dropped 24.6 percent in October for its biggest monthly decline in the gauge's 20-year history.
Hong Kong's Hang Seng index climbed 5.3 percent, with bank shares posting solid gains after a Chinese central bank official reportedly said Beijing had abandoned its lending caps in a move that could make funnelling money to small firms much easier.
The benchmark KOSPI in South Korea gained 1.4 percent, boosted by details on a $11 billion (6.7 billion pounds) government fiscal stimulus package that officials said would add a full percentage point to total output.
|
|
