Asian stocks rally on recovery hopes
AFP - 1 hour 6 minutes ago
TOKYO (AFP) - - Asian stocks rose on Monday, with Tokyo hitting the highest level for almost two months as investors hoped that the US economy would start to recover this year after a dire 2008.
Investors took their cue from Wall Street, where shares soared on Friday on expectations that US president-elect Barack Obama's massive stimulus plan would help to revive the recession-hit economy.
Tokyo's Nikkei-225 index closed 2.07 percent higher in a half day of trading, its first of 2009, ending above the 9,000-point level for the first time since November 10.
Stocks climbed 1.3 percent in Hong Kong and gained 2.1 percent in Shanghai by midday. Taipei ended 2.3 percent higher and Manila surged 5.4 percent, but Sydney slipped 0.7 percent.
"Stocks are gaining support from the stronger stock market in the United States and expectations of a recovery in the US economy this year," said Makoto Sengoku, a market analyst at Tokai Tokyo Securities.
A weaker yen gave a boost to Japanese exporters, which have been hit hard by the recent strength of the Japanese currency, he said.
Dealers said they were also encouraged to buy shares as fears of a collapse of the US auto industry receded after the US government approved a financial rescue package in December.
But "there still remain concerns over corporate profits and the overall economy both in the United States and in Japan," said Ryuta Otsuka, a strategist at Toyo Securities.
"In the longer term, stock prices may remain fragile," Otsuka said.
Stock markets in the United States, Europe and much of Asia rose sharply on Friday on hopes for a brighter year ahead after a horrendous 2008 that saw Wall Street's Dow Jones index plunge 33.84 percent, the worst loss since 1931.
"Equity indexes should end 2009 substantially higher across the globe," predicted Dariusz Kowalczyk, chief investment strategist at CFC Seymour in Hong Kong.
"However, in the short term, volatility is likely to persist, and the recent surge in optimism is likely to be tested severely in the first quarter by very negative macroeconomic data," he added.
The Dow Jones Industrial Average surged 258.30 points, or 2.94 percent, Friday to finish at 9,034.69.
Obama, who takes office on January 20, has already pledged to step up efforts to revive the moribund economy in the face of the worst global financial crisis since the Great Depression.
Some analysts questioned how long the New Year rally would last.
"Looking ahead, there are few clear market-moving factors which would further push up share prices, in terms of both economic indicators and corporate earnings," said Otsuka at Japan's Toyo Securities.
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