Asian markets up on Wall Street gains

Source: Exec Digital USA

Date :29/11/2007 06:37:47

Asian stocks rallied today, tracking an overnight surge on Wall Street, amid a brightening outlook for the U.S. economy — a key export market for Asian companies.

Investors took heart after the Dow Jones industrial average mustered its biggest two-day point gain in five years following hints from a Federal Reserve official that the central bank may lower interest rates again.

Hong Kong's Hang Seng Index soared 1,111.30 points, or 4.06 percent, to 28,482.54 points. In Tokyo, the Nikkei 225 average shot up 359.96 points, or 2.38 percent, to finish at 15,513.74 points.

Leap

On the Chinese mainland, stocks also rallied, with the benchmark Shanghai Composite Index jumping 4.2 percent a day after it ended at a three-month low.

Markets in Australia, Singapore, South Korea, Taiwan and the Philippines advanced.

Asian stock markets have been battered this month as investors worried about a slowdown in the U.S. economy as the subprime mortgage crisis dragged on.

But sentiment seems to be improving as companies that made losing bets on subprime mortgages, such as Citigroup Inc. and Freddie Mac, are coming up with ways to raise cash.

Japanese investors snapped up auto and banking shares after the yen declined against the dollar, which helps the country's exporters by inflating their foreign revenues when repatriated.

"Property stocks are mainly riding on the potential rate-cut theme, but gains may not be sustained as the market has already factored in all good news," said Peter Lai, director at DBS Vickers Securities Ltd.

Ongoing

But analysts said trade would remain choppy over the next few sessions amid lingering concerns.

"Worries about global credit crunch remain an overhang in the near term," said Francis Lun, general manager at Fulbright Securities, adding he expected the index to find firm support at the 27,000 level.

To push beyond that, the market needs a catalyst such as the implementation of China's highly anticipated individual overseas investment plan, which would allow mainland individuals to invest directly in the Hong Kong stock market, he said.

Chinese officials floated the idea in August, prompting a flood of hot money into the market, but have since backed off, saying more research needs to be done.

In New York Wednesday, the Dow rose 331.01, or 2.55 percent, to 13,289.45, adding to the blue chip index's 215 point gain on Tuesday and giving the market's best known indicator its largest two-day point gain since October 11, 2002.

November 29, 2007