Asian stocks rally after China announces stimulus package (Lead)

November 10th, 2008 - 7:27 pm ICT by IANS  

Tokyo, Nov 10 (DPA) Asian stock markets staged strong rallies Monday, with Japan’s key Nikkei 225 Stock Average closing above the 9,000-point threshold, following the announcement of an economic stimulus package by the Chinese government.The Nikkei index soared 498.43 points, or 5.81 percent, to close at 9,081.43.

The broader Topix index of all first-section issues was also up 37.65 points, or 4.28 percent, to 916.65.

Hong Kong stocks rose by 3.52 percent as investors reacted positively to the $600 billion economic stimulus package for the Chinese economy announced by Beijing.

The blue-chip Hang Seng Index consolidated a three percent rise in share prices on Friday with a 501.2-point rise to close the day at 14,744.63.

In early trading, the market soared by 5.5 percent to break through the 15,000-point barrier before falling back later in the day. Turnover was 60.7 billion Hong Kong dollars ($7.83).

Analysts said the rise in share prices was due to China’s economic stimulus package aimed at helping industries hit by the global slump.

Shares in some Chinese companies saw double-digit percentage rises.

Shares on mainland China’s main stock market jumped by more than seven percent in another positive reaction to the government’s move to stimulate domestic demand and buffer the economy against the effects of the global financial crisis.

The key Shanghai Composite Index, which measures shares traded in local and foreign currencies, gained 127.09 points, or 7.27 percent, to end the day at 1,874.80.

The smaller Shenzhen Composite Index also soared by more than six percent as combined turnover in the two markets nearly doubled to 78.636 billion yuan ($11.52 billion) from 40.2 billion yuan Friday.

The government Sunday said it would spend an estimated four trillion yuan ($588 billion) on infrastructure projects, reduce some taxes and loosen bank lending requirements.

The package would finance 10 major infrastructure programmes over the next two years, including transportation, rural projects, low-cost housing, environmental projects and post-disaster reconstruction, it said.

Other measures include loosening lending rules for commercial banks and a reform of value-added taxes that would reduce the tax bills of companies by an estimated 120 billion yuan ($17.6 billion).

Shares also soared Monday on the Seoul stock exchange, led by steel and machinery stocks which got a boost from China’s stimulus package.

The benchmark Kospi index surged 17.97 points, or 1.6 percent, to close at 1,152.46.

The main index of the technology-heavy Kosdaq market rose 6.63 points to 322.17.

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