Asian markets gain on economic policy hopes

10 November 2008 07:19  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian markets were traded higher on Monday as investors cheered efforts to contain the impact of the global financial crisis that was threatening to derail world economic growth.

 

China had announced a $586bn package to ensure its economic activities would not slow rapidly while the rest of the industrialised economies reeled under the impact of the global financial crisis.

 

Taiwan also made a surprise 25-basis point cut in policy rates to 2.75%, its fourth such move in less than two months.

 

The biggest developed and emerging economies in the world – the G20 – are expected to come up with further measures to combat the deepening financial crisis when leaders meet in Washington on Saturday.

 

“Just by taking decisive steps they can reassure the markets and consumers,” said David Cohen, Singapore-based chief economist at consultancy firm Action Economics.

 

At 13:46 hours Singapore time (0546 GMT), Hong Kong’s Hang Seng index jumped 3.39% to 14,726.59, Japan’s Nikkei 225 was up 5.87% at 9,086.43 and South Korea’s KOSPI composite index rose 1.58% to 1,152.46.

 

Petrochemical stocks also traded higher. Asahi Kasei was up 7.34%, Mitsubishi Chemical added 4.79% and Mitsui Chemicals rose 7.18% in Japan.

 

South Korea’s LG Chemical gained 5.69%, SK Energy rose 5.70% and Hanwha Chemical edged higher by 0.18%.

 

With industrialised economies led by the US and Europe expected to plunge into recession, “probably China is the most important engine to world growth,” said Cohen.

 

“China is in a position to inject some money (into) its own economy. They (Chinese authorities) can make such aggressive stimulus,” he said, citing China’s budget surplus in the first half of the year and high international reserves.

 

“Increased spending is welcomed by the whole world,” added Cohen.

 

Leon Toh contributed to this article.

 

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By: Pearl Bantillo
+65 6780 4359

< previous article(ICIS Podcast: Chemical News Central 2 November 2009)

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