Asian stocks rise on US rally, stimulus hopes

[January 05, 2009]  HONG KONG (AP) -- Asian stock markets rose strongly Monday, with benchmarks in Tokyo and Shanghai gaining more than 2 percent, as Wall Street's rally and stimulus plans in the U.S. and elsewhere buoyed investor hopes for 2009.

Investors seemed to find encouragement after President-elect Barack Obama urged congressional leaders Saturday to move quickly on recovery measures that aides say could cost as much as $775 billion.

In a shortened half-day session, Tokyo's Nikkei 225 stock average gained 183.56 points, or 2.1 percent, to 9,043.12, its first finish above the 9,000-point line since Nov. 10. Hong Kong's Hang Seng climbed 1.3 percent to 15,230.87, though was trading well off the day's highs.

In mainland China, Shanghai's key index gained 2.2 percent to 1,860.36. Taiwan and Thailand's benchmarks were up more than 2 percent, with stock measures in India, Singapore and South Korea higher as well.

The upbeat mood came after global markets rang in the new year with a strong advance despite more dismal economic news, including evidence that manufacturing in the U.S., Europe and China was deteriorating amid the slowdown.

While increasingly optimistic that markets can only fare better this year after the relentless selling of 2008, many investors are still bracing for a difficult first half, when company earnings and economic data could prove especially bleak.

"We are still trading more on sentiment than fundamentals," said Dariusz Kowalczyk, chief investment strategist for CFC Seymour in Hong Kong. "The strong positive closing overseas had to have an impact on Asia."

The session was the year's first for a number of Asian countries, including Japan, where markets were still closed Friday, and volumes were higher across the region as traders returned from the holidays. Rising commodities prices lifted energy and metal producers, and Japanese shares got a boost from a weakening yen, which helps the country's exporters.

In his weekend radio address, Obama urged Congress to move quickly on an economic recovery plan, which aims to create 3 million jobs. Congressional aides briefed on the measure say it probably would include tax cuts of $500 to $1,000 for middle-class individuals and couples; Obama advisers told The New York Times on Sunday that tax cuts for workers and businesses could total $300 billion.

"Sentiment was upbeat as investors were hopeful over U.S. economic stimulus measures," said Yutaka Miura, senior strategist at Shinko Securities Co. Ltd. in Tokyo.

Confidence also got a boost from Wall Street's gains on Friday, when the Dow Jones industrial average jumped nearly 3 percent, closing above 9,000 for the first time in two months as investors shrugged off a weaker-than-expected report on manufacturing.

Wall Street futures were modestly lower, pointing to a weak opening Monday in New York. Dow futures were down 36 points, or 0.4 percent, at 8,922 and S&P 500 futures were off 3.1 points, or 0.3 percent, at 922.30.

In India, Mumbai's Sensex climbed 2 percent after the government announced plans late Friday to lower key interest rates by 1 percentage point and boost spending to arrest the country's slowing economic growth. It was the second stimulus package announced in the past month.

Crude oil price rose in Asia trade, with light, sweet crude for February delivery up 86 cents at $47.20. The contract soared last week to settle Friday at $46.34, up $1.74, amid spiraling violence in Gaza and expectations of OPEC productions cuts.

In currencies, the dollar rose to 92.02 yen, up from yen 91.79, and the euro traded lower at $1.3877, down from $1.3918.

[Associated Press; By JEREMIAH MARQUEZ]

AP writer Shino Yuasa contributed to this report from Tokyo.

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