Asian markets surge on upbeat Barclays forecast
Asian markets advanced robustly Tuesday, led by a jump of nearly 5
percent in Japan, as an upbeat earnings forecast from British bank
Barclays eased worries about the health of major banks.
Investors were also encouraged by Wall Street's gains Monday, while
U.S. stock index futures were pointing to a strong open Tuesday in New
York.
The Barclays news "immediately raised hopes that banks may be able to
weather the current risks facing the global financial sector," said
Motomi Hiratsuka, head of sales trading at BNP Paribas in Tokyo. "But it
remains to be seen how long this (boost in sentiment) will last."
Japan's Nikkei 225 jumped 378.93 points, or 4.9 percent, to 8,061.07,
while Australia's S&P/ASX200 index rose 3 percent to 3,444. India's
Sensex also advanced, gaining 2.8 percent to 8,913.35.
Several Asian markets, including Hong Kong and South Korea, remained
shut for the Lunar New Year holiday. Markets in mainland China,
Singapore, Malaysia and Taiwan were also closed.
Shares in Barclays PLC surged more than 70 percent Monday after the
bank said it expects pretax profits for 2008 to be well over 5.3 billion
pounds ($7.3 billion), despite 8 billion pounds of asset write downs at
its investment banking division.
In a joint letter to reassure investors, the bank's Chairman Magnus
Agius and Chief Executive John Varley said the bank did not need any
more capital injections to cover potential losses associated with the
global financial turmoil.
Dutch bank ING provided an extra fillip for banking stocks, jumping
nearly 28 percent after it said it would get a government backstop for
80 percent of a 27.7 billion euro ($36.4 billion) portfolio of risky
assets.
Major Japanese financial stocks rose in the wake of gains in European
banks. Mitsubishi UFJ Financial Group jumped 8.3 percent, while Sumitomo
Mitsui Financial Group Inc. rose 8.1 percent.
Buoyed by the positive banking news, European markets surged
overnight, with Britain's FTSE 100 gaining 3.9 percent to 4,209.01,
while Germany's DAX climbed 3.5 percent at 4,326.87.
On Wall Street, the Dow Jones industrials zigzagged to a higher
close, ending up 0.5 percent at 8,116.03. Stocks rose in response to
Pfizer Inc.'s $68 billion planned acquisition of Wyeth, a deal that
reassured investors that mergers could still take place in a recession.
Dow futures were up 102 points, or 1.3 percent, to 8,139, while S&P
500 futures were up 11 points, or 1.3 percent, at 841.8.
Markets in Singapore and South Korea will reopen today, and Hong
Kong's markets will reopen Thursday. Trading in mainland China and
Taiwan will be closed all week and resume Feb. 2.
Oil prices, meanwhile, hovered just above $46 a barrel as traders
weighed waning demand and OPEC's compliance with production cuts.
Light, sweet crude for March delivery was up 53 cents at $46.26 a
barrel in electronic trading on the New York Mercantile Exchange.
BANGKOK, Tuesday, AP |
