World Markets Extend Gains

Tuesday, Jan 6, 2009  |  Updated 4:03 AM CDT
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World Markets Extend Gains

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Hong Kong was the only major regional market to fall, with the Hang Seng index down 53.80 points, or 0.4 percent, at 15,509.51 points.

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HONG KONG – Asian stock markets were mostly higher Tuesday, shrugging off lackluster trade overnight in the U.S. and Europe amid growing optimism the world economy would start to recover later this year.

Overseas markets, meanwhile, were poised to follow Asian bourses higher as European benchmarks gained early in the session and Wall Street futures pointed to a positive open.

After a disastrous 2008, Asian stocks have shown strength of late. Analysts say foreign investors, who pulled billion of dollars from the region last year, have begun trickling back amid speculation that government polices to shore up a decaying global economy could help Asian equities outperform in 2009.

"The market is likely to trend higher. Markets in the region are definitely cheap and major players have been accumulating over the last three weeks," said Alex Tang, head of research at Core Pacific-Yamaichi in Hong Kong.

In Tokyo, the Nikkei 225 stock average rose 37.72 points, or 0.4 percent, to 9,080.84 as a weaker yen boosted exporters like Sony Corp. and Canon Inc.

Sony jumped 7.6 percent, Canon was up 5 percent and electronics giant Panasonic Corp. gained 4.3 percent. Toyota Motor Corp. added 1.3 percent despite announcing new steps to reduce auto production in Japan.

The Shanghai Composite Index rose 3 percent to 1,937.15, as property firms got a boost after a top official said the government would increase possible financing methods for developers and improve access to low-cost housing.

Eslewhere, South Korea's Kospi rose 1.8 percent and Australia's key benchmark added 1.5 percent. Hong Kong was the only major regional market to fall, with the Hang Seng index down 53.80 points, or 0.4 percent, at 15,509.51 points.

As trading opened in Europe, Britain's FTSE 100 was up 0.6 percent, Germany's DAX gained 0.4 percent and France's CAC-40 added 0.1 percent.

Despite the gains, there was scant evidence that the world economy or battered companies were on the mend.

Toyota said it was halting production at all 12 of its Japanese plants for 11 days over February and March. Overnight in the U.S., new data showed that American auto sales plunged 36 percent in December, with General Motors Corp. selling its lowest number in 49 years.

Amid the gloom, caution on Wall Street overtook the encouragement investors found in President-elect Barack Obama's calls for an economic stimulus package that reportedly could include as much as $300 billion in tax cuts.

The Dow closed lost 81.80, or 0.9 percent, to 8,952.89, but off its lows. Broader stock indicators posted more modest declines, with the Standard & Poor's 500 index falling 4.35, or 0.5 percent, to 927.45.

Wall Street futures were slightly higher. Dow futures rose 5 points, or 0.1 percent, to 8,823 and S&P500 futures gained 2.4 points, or 0.3 percent, to 929.80.

Oil prices were slightly lower after rising sharply overnight on concerns about Israel's ground offensive in Gaza and a dispute between Ukraine and Russia over gas imports.

In Asian trade, light, sweet crude for February delivery was down 98 cents at $47.83 a barrel on the New York Mercantile Exchange. The contract rose $2.47 cents to settle at $48.81 a barrel overnight.

In currencies, the dollar was higher at 93.67 yen, compared to 92.86 yen earlier, building on its recent gains. The euro traded 1.6 percent lower at $1.3430.

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