Business | Markets
Asian stocks recover as bargains sought on hopes of government bailout
Asian stocks mostly rose and government bonds cut their gains on Monday, on hopes for more government rescues of limping industries and as long-term investors scooped up cheap shares.
- Agencies
- Published: 10:00 November 17, 2008
- Image Credit: Bloomberg
Hong Kong: Asian stocks mostly rose and government bonds cut their gains on Monday, on hopes for more government rescues of limping industries and as long-term investors scooped up cheap shares.
However, oil prices dipped to within striking distance of last week's 22-month low after policymakers from both emerging and developed economies who met in Washington chose to leave individual governments to tend their own backyards.
A report on Monday confirming that Japan has joined a growing list of economies sliding into recessions.
"For the time being, hopes that China will be able to maintain its economic growth will lend some support to the Asian markets," said Louis Wong, research director with Phillip Securities in Hong Kong.
Hong Kong's Hang Seng index rose 0.4 percent in choppy trade, with shares of China Mobile and HSBC leading the way higher.
The MSCI index of Asia-Pacific stocks outside of Japan fell 1.4 percent, extending last week's 9.7 drop. Year-to-date losses have piled up to around 57 percent.
Tokyo's Nikkei share average recovered from early losses, rising 2.6 percent, as the yen fell and as long-term investors snapped up cheap stocks. Some of the stocks lifting the index, such as Takeda Pharmaceutical, were so-called defensive plays, which were expected to perform relatively well in a slowdown.
The yen fell against the euro and the US dollar after a report showed Japan's gross domestic product shrank by 0.1 percent in the July-to-September period and government officials said the situation could worsen further.
However, with the process of widespread risk reduction still very much intact, dealers did not expect the yen to stay down for long.
The US dollar rose 0.4 percent to 97.46 yen, and the euro climbed 0.2 percent to 122.48 yen.
US light crude for December delivery fell about $1 to $56.06 a barrel, near the $54.67 a barrel low it hit on Thursday, its weakest since January 2007.
"G20 leaders may have urged fast action to deal with the global financial crisis, but concern over the weakened international economic outlook still weighs heavily," said David Moore, a commodities strategist at the Commonwealth Bank of Australia.
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