Asia chems rally, Nikkei posts biggest 1-day gain

14 October 2008 11:09  [Source: ICIS news]

SINGAPORE (ICIS news)--Asia petrochemical stocks rallied on Tuesday and regional markets surged with Japan’s Nikkei index posting its biggest one-day gain as investors welcomed bailouts in the US and Europe, cooling fears of a global recession.

 

"Confidence is everything in financial markets," said Arden Dai, an analyst with Frost and Sullivan Shanghai.

 

At the close of trading, Japan’s Mitsubishi Chemical was up 14.11%, Asahi Kasei gained 15.08% and Mitsui Chemicals jumped 14.83%. The Nikkei 225 index rose 14.15% to close at 9,447.57 points, the benchmark’s biggest one-day gain in its 58-year history.

 

State-owned majors Sinopec and PetroChina rose 3.72% and 2.99% respectively in Hong Kong, while the Hang Seng index jumped 3.19% to 16,832.88 points.

 

South Korea’s SK Energy gained 8.69%, while the benchmark KOSPI composite index gained 6.14% to close at 1,367.69 points.

 

Despite the recovery, experts cautioned investors about being too optimistic.

 

"Investors should be more careful while trading and should focus on stocks with sound fundamentals, while keeping a close eye on all developments," said Patareeya Benjapolchai, president of the Stock Exchange of Thailand.

 

"The current global financial crisis has significantly hurt both Thai and foreign investor sentiment and led to volatile trade in response to news and reports from within the country and abroad," he added.

 

Later on Tuesday, the US Treasury Department is expected to announce plans to inject over $250bn into banks and for Federal Deposit Insurance Corp to provide unlimited guarantees on bank deposits that do not bear interest. The Dow Jones Industrial Average soared 11.08% on Monday, its biggest single-day gain.

 

This followed a rally in Europe as several governments took an interventionist stance in their banking systems, the UK for instance pledging billions of pounds to ailing institutions Royal Bank of Scotland, Lloyds TSB and HBOS.

 

Pearl Bantillo and Judith Wang contributed to this article

 

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