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Market Eye
| China stimulus plan boosts stocks, commodities | 10/10/2008 09:56:32 | HONG KONG: Asian stocks and commodity prices climbed on Monday after China
unveiled a nearly $600 billion economic stimulus plan, one of
many measures
countries are undertaking to limit the economic fallout from the financial crisis.
Japanese government bonds and U.S. Treasuries retreated as funds flowed back into riskier assets on hopes for stimulus measures by other major economies, with U.S. President-elect Barack Obama pushing for urgent passage of more fiscal spending in the world's largest economy.
The yen fell as investors embraced the high-yielding Australian dollar after China's announcement and as financial officials from the Group of 20 economic powers, which include major developing countries, ironed out ways to stimulate growth at a weekend meeting.
"The market is choosing to focus on all this talk of stimulus from around the world," said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney.
The damage inflicted by the worst financial crisis since the Great Depression was highlighted late last week by data showing the U.S. jobless rate hitting a 14-year high just as General Motors and Ford Motor Co. said they were fast burning through cash for operations.
Japan's Nikkei share average rose 5.5 percent in early trade, getting a boost from the gains on Wall Street late last week on some bargain hunting among investors.
The market shrugged off data earlier on Monday showing Japan machinery orders matched the biggest quarterly drop on record in the July-to-September period, focusing instead on the hefty Chinese spending measures targeting infrastructure.
The Shanghai Composite index jumped 5.3 percent, helping lift the MSCI index of Asia-Pacific stocks outside of Japan 3.5 percent.
South Korea's KOSPI index pushed up 1.5 percent after initially struggling to hold gains due to the drag of Hyundai Motor, which lost 4.4 percent.
But Taiwan's benchmark TAIEX fell, struggling even after the country's central bank delivered a surprise interest rate cut at the weekend, the fourth reduction in a little more than a month to shield the export-dependent economy.
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