Asian-Pacific stocks rise on South Korea financial rescue package (Lead)

October 20th, 2008 - 6:51 pm ICT by IANS  

Tokyo, Oct 20 (DPA) Asia-Pacific stocks soared Monday after South Korea announced a package of more than $130 billion to stabilize the country’s financial sector.Japan’s benchmark Nikkei 225 Stock Average was up 3.59 percent at 9,005.59 while its broader Topix index of all first-section issues gained 3.7 percent to close at 927.37.

The market for Asia’s largest economy was also buoyed by speculation that corporate earnings reports would beat analysts’ expectations.

The biggest percentage increase of the day was seen in Hong Kong, where the benchmark Hang Seng Index closed up 5.28 percent, buoyed by a general rebound in stocks across Asia.

The blue-chip index closed at 15,323 and ended a three-day losing streak amid wider optimism among Asian investors that governments were taking tough action to shore up their economies, analysts said.

In China, analysts said they expected the government would unveil a stimulus package after the National Bureau of Statistics said the country’s growth rate slowed to 9 per cent in the third quarter, its lowest rate in five years.

In South Korea, the government announced plans Sunday to pump $130 billion into the banking sector that would mainly be used to secure banks’ maturing foreign currency debt.

South Korea followed other countries’ in unveiling financial rescue packages after the US subprime mortgage crisis led to a credit crunch, caused financial institutions to collapse and spread around the globe.

Mainland China’s key Shanghai Composite Index, which tracks shares traded in local and foreign currencies, gained 2.25 percent to close at 1,971.01.

The smaller Shenzhen Component Index also climbed 3.14 percent to 520.38.

Financial and property shares led the rally, which followed heavy losses in the two markets last week.

In South Korea, the benchmark Kospi index rose 2.3 percent to close at 1,207.63. The local currency, the won, also soared against the dollar, helped by the government’s plan to ease the liquidity crunch and prop up the country’s troubled financial industry.

Sydney’s ASX 200 climbed 4.3 percent to 4,142. There were rises in all sectors with retailers gaining after weeks in the doldrums.

Mining market leader BHP Billiton Ltd put on 6 percent while its rival Rio Tinto Ltd gained 5 percent.

Sentiment was helped by big banks dropping their spreads to accord with easier access to the money markets because of government guarantees for all deposits.

Taiwan’s Taiex index bucked the regional trend as it closed down 0.58 percent at 4,931.84 after government limits stopped Taipei’s stock market from falling as much as other world markets last week and investors sold stocks Monday to catch up.

New Zealand’s benchmark NZX 50 index rose 2.89 percent while in South-East Asia, Singapore’s Straits Times Index took a 3.23-percent leap to 1,939.22. The Jakarta Stock Index gained 1.97 percent, and the Stock Exchange of Thailand Index was up 1.2 percent.

In China, the government Monday reported 9-percent growth in estimated gross domestic product for the July-to-September quarter, maintaining China’s fast but marginally slower expansion despite global financial woes.

The State Council, or cabinet, Sunday said China would focus on developing rural areas and measures to encourage more loans for small businesses for the rest of this year.

The global financial turmoil would have a gradual effect on China and the government would “adopt flexible and cautious macroeconomic policies” to maintain growth, the State Council said in a statement.

The statement said China would also cut the tax on home sales to encourage people to buy apartments, after sales slumped by more than 50 percent in Beijing and 39 percent in Shanghai in the first eight months of this year.

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