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Asian shares gain on 2009 hopes
(Agencies)
Updated: 2009-01-02 16:44 HONG KONG -- Asian shares rallied on Friday, starting the new year on hopes the worst of the global crisis may be over after a brutal 2008, while safe-havens such as US Treasuries fell as investors showed signs of taking on risk.
Still, data on Friday signalled a tough road ahead for large parts of the world given that major economies from the United States to Japan are stuck in recession after experiencing the worst financial crisis in generations. The euro and the South Korean won fell on concerns about weakening economic growth, while crude oil prices tumbled more than $2 a barrel, cutting into a rally of about 14 percent on the final trading day of 2008. European stocks were seen little changed on Friday in their first session of the new year. Euro zone and US manufacturing activity data for December is due later in the day. A recovery in global markets will hinge on whether investors become willing to wean themselves off assets seen as safer, such as US Treasuries, which have outperformed despite offering the lowest yields in decades. Policy makers have slashed interest rates and pledged to spend to try to fight off the economic slowdown, which supported sentiment on Friday. "General hopes about the new year, such as that the real effects of global governments' economic stimulus measures will be felt, are boosting stocks," said Yun Lee, a market analyst at Woori Investment & Securities in Seoul. The MSCI index of Asia-Pacific stocks outside Japan rose 0.7 percent as of 0645 GMT. The index had slumped 53 percent in 2008, its worst year on record, though it has now gained more than 25 percent since hitting a five-year low in late November. Hong Kong shares rose 3 percent. Wireless carriers such as China Mobile jumped after China on Wednesday approved the issuance of long-awaited licenses for next generation mobile networks, opening the door to some $41 billion in spending for equipment. Stocks in South Korea gained 2.9 percent, helped by a 11.4 percent jump in LG Display on hopes that prices for flat screens could bottom out earlier than expected as producers cut output. Singapore's main index advanced 2.5 percent, while markets in India and Chinese Taiwan posted more modest gains. Shares in Australia fell 0.2 percent. Financial markets in Japan and China were closed for New Year holidays. Economic Worries Remains The gains in Asian shares came despite a continued raft of bleak economic data, as consumers worldwide pare their spending and companies reduce output, setting off fears about jobs and deflation. |
