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27 February 2024

Asian markets rise due to Wall Street gains

By Agencies


Asian markets rallied on Friday, further recovering from their plunge earlier this week, as investors took heart from gains on Wall Street overnight and positive figures about the US economy.

Investors also welcomed details of a tax rebate for US consumers announced as part of US President George W Bush's economic stimulus plan. The tax rebate will put between $300 and $600 (Dh1,095 and Dh2,190) into most taxpaying consumers' pockets.

"The markets are reacting to news that Bush and Congress have agree to accelerate tax rebates for US consumers so they can go out and buy more exports from Asia," said Francis Lun, a general manager at Fulbright Securities in Hong Kong.

Hong Kong's Hang Seng Index jumped nearly 6 per cent in early trade before trimming some gains. By mid-morning, it was up 1,138 points, or 4.83 per cent, at 24,667 points. The index fell 2.2 per cent the previous day.

In Tokyo, Japan's benchmark Nikkei 225 index extended its gains for a second straight session, rising 367.05 points, or 2.8 per cent, to 13,459.83 by mid-day. It gained 2.1 per cent on Thursday.

Markets in Australia, South Korea, Taiwan and the Philippines were also up.

On Wall Street on Thursday, the Dow Jones industrials rose more than 100 points, partly lifted by data that suggested the US job market is holding up. The Labor Department said number of people seeking unemployment benefits last week fell for a fourth straight week.

Investors were also cheered by strong gains Thursday in Europe.

Hong Kong gainers were led by property issues on expectations that the US Federal Reserve would again slash rates when it meets next Tuesday and Wednesday. Hong Kong banks usually match the US rate cuts as the Hong Kong dollar is pegged to the US currency.

Asian markets have had a volatile week, buffeted by worries that the US, a key export market and the world's biggest economy, was going to contract.

On Monday and Tuesday, all Asian markets suffered steep losses before rebounding Wednesday and Thursday after the US Fed slashed lending rates by 0.75 per cent.

The Hong Kong index bucked on Thursday's upward trend. After rising 3 per cent in the morning, it slumped 2.3 per cent later in the day after French bank Société Générale announced a massive write-down in subprime assets and detailed how a junior trader had lost the bank $7.18 billion.

Analysts described Hong Kong's drop as a "knee-jerk reaction" to the French bank's news.

"We should have ended up yesterday," said Rob Hart, an analyst at Morgan Stanley. "But there was no where else to pull money from when the Société Générale news came out. Tokyo and Seoul had already closed."

The Dow Jones industrial average rose 0.88 per cent to 12,378.61 on Thursday, following a 2.5 per cent surge on Wednesday. The Nasdaq composite index advanced 1.9 per cent to 2,360.92.

US stock index futures were also up, suggesting that rally could continue. Dow futures were up 37 points, or 0.3 per cent, to 12,402, while Nasdaq futures were up 15.5 points, or 0.8 per cent, to 1,852.5. (AP)