Asian markets rally on Japan stimulus, better data

Posted in Asia | 10-Apr-09 | Author: Jeremiah Marquez| Source: Washington Post

Freshmen listen to an explanation in front of an electric market board during their training at Tokyo Stock Exchange in Tokyo, Thursday, Apr. 9, 2009.

HONG KONG -- Asian stock markets resumed their upward march Thursday as investors cheered Japan's $150 billion stimulus proposal and signs recession was starting to ease in the world's second-largest economy.

Most major markets in the region gained along with the dollar and crude oil prices following two days of declines that interrupted a powerful advance over the last month. Japanese exporters like Sony and Sharp helped lead the way.

Japan's ruling party is seeking a stimulus package that is substantially bigger than originally announced, involving 15 trillion yen ($150.4 billion) in new fiscal spending. The measures, should they win final approval, would equal some 3 percent of the country's gross domestic product.

Asia's largest economy has become catatonic since Western demand for cars, electronics and other exports crucial to its growth evaporated in the last year, forcing companies big and small to make drastic cuts to production and staff.

But Japan's machinery orders _ an indicator of how much the country's companies plan to spend _ offered a glimmer of hope after rising for the first time in five months. Core private sector machinery orders grew 1.4 percent in February from the previous month to 728.1 billion yen ($7.3 billion), the government said.

Investors were growing more confident, but any downbeat news from U.S. companies reporting earnings in the coming weeks or about Asia's economies could quickly sour sentiment.

"Things are stabilizing to a greater extent, but the economic situation hasn't entirely improved overall," said Lucinda Chan, a director at Macquarie Private Wealth in Sydney. "

Japan's Nikkei 225 stock average added 296.33 points, or 3.5 percent, to 8,891.34, while Hong Kong's Hang Seng climbed 333.92, or 2.3 percent, to 14,808.78.

South Korea's Kospi rose 3.7 percent to 1,309.88. Elsewhere, Australia's benchmark gained 1.2 percent, Taiwan's jumped 4 percent and Singapore advanced 2 percent.

Overnight in New York, insurance and technology shares led Wall Street higher in a volatile day, lifted by a deal merging two major homebuilders and news the government was ready to extend aid to battered life insurance firms.

The Dow Jones industrials rose 47.55, or 0.6 percent, to 7,837.11. The Standard & Poor's 500 index rose 9.61, or 1.2 percent, to 825.16.

U.S. futures pointed to a higher open on Wall Street. Dow futures gained 77 points, or 1 percent, to 7,870 and S&P500 futures rose 8 points, or 1 percent, to 830.80.

Oil prices rose to above $50 a barrel Thursday in Asia as stronger-than-expected results from U.S. retailers suggested the worst of a plunge in American consumer spending may be over.

Benchmark crude for May delivery rose 92 cents to $50.30 a barrel. The contract rose 23 cents on Wednesday to settle at $49.38.

The dollar gained to 99.94 yen from 99.72 yen. The euro rose to $1.3256.