Asia markets rise on econ pump-priming hopes

03 November 2008 10:01  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian petrochemical shares kicked off the month of November on a positive note, closing mostly higher on Monday, on hopes that the series of economic pump-priming would help cushion the region from the blows of the global downturn.

 

“There is a better mood in financial markets with the positive policies announced, but it can be short-lived because of the slowing down we can see from the economic data,” said David Cohen, chief economist at consultancy firm Action Economics, who warned that the rebound may not be sustained.

 

South Korea, the region’s fourth largest economy, announced a 14 trillion won ($10.98bn) stimulus package, including W3,000bn worth of tax cuts.

 

At the close of trading, South Korean petrochemical stocks Hanwha Chemical rallied 14.88% while LG Chem rose 0.13%, in line with gains clocked by the KOSPI Composite Index, which rose 1.44% to 1,129,08.

 

South Korea’s policy move followed Japan’s announcement of its first interest rate cut in seven years, along with a $50bn worth of fiscal stimulus to boost its flagging economy.

 

Markets in Japan are closed for a public holiday.

 

In Hong Kong, China’s state-owned oil refiner PetroChina closed up 4.39% but Sinopec fell 4.17%. The Hang Seng Index was up 2.69% to 14,344.37.

 

Singapore’s Straits Times Index was up 5.0% to 1,883.75.

 

Regional bourses tracked US markets’ gains on Friday, with the Dow Jones industrials up 144.32 points or 1.57% to close at 9,325.01.

 

“The movement in the market is so volatile that any favourable moves from policy makers can (prompt a) rebound (in) the market, but these are short-lived and there is an awful amount of turmoil ahead,” said Cohen.

 

The prevailing uncertainties of how severe the impact would be on the economies of major global economies such as Europe, the US and Japan put Asian bourses at risk of another beating soon, he said.

 

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By: Leon Toh
+65 6780 4359

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