Investors pinned their hopes of a stock market recovery on interest rate cuts and action by the next US president to stem the financial crisis as the White House race neared the finishing line yesterday.
Traders were betting the winner of the US vote would take extra steps to tackle a looming recession in the world’s largest economy, with polls giving Democratic Senator Barack Obama a wide lead over Republican Senator John McCain.
“Investors have high expectations” for the next president to take action on the economy, Sumitomo Trust Bank strategist Saburo Matsumoto said.
GRAPHIC: AFP
Plunging auto sales in the US and Japan provided fresh evidence of the fallout of the credit crunch, while the world’s biggest reinsurer Swiss Re posted a quarterly loss of US$258 millions due to the market turmoil.
Asian markets saw mixed fortunes ahead of the US elections. Japan’s Nikkei stock index closed up 6.27 percent, lifted by a weaker yen and reports of a possible takeover of struggling electronics maker Sanyo by rival Panasonic.
Seoul ended 2.2 percent higher, a day after the South Korean government announced a major package to stimulate the economy.
But several markets in the region lost ground, including Sydney, which ended down 0.2 percent but off an early low as the rate cut lent some support. Chinese share prices closed down 0.76 percent
Analysts said growing worries about the health of the global economy could put the brakes on the recent rally in world share prices.
“We believe that the recovery has gotten ahead of itself,” Dariusz Kowalczyk, chief strategist at CFC Seymour in Hong Kong, wrote in a note. “We expect another major episode of risk aversion to take hold of markets in the near future, with the potential for commodities and stocks to hit new lows for the year.”
Wall Street’s mixed session, along with a weak reading on the US manufacturing sector overnight, prompted others to take some money off the able after Asian bourses posted strong gains in the past week.
Data on the US manufacturing sector showed activity fell for the third month in a row last month. A business survey also painted a gloomy snapshot of the corporate sector.
Key US employment data due on Friday is expected to show that the US economy lost a further 200,000 jobs last month.
Meanwhile South Korea, Japan and China are to hold talks later this month on expanding currency swap deals to bolster defenses against the global financial crisis, a senior Seoul official said yesterday.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
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THUGGISH BEHAVIOR: Encouraging people to report independence supporters is another intimidation tactic that threatens cross-strait peace, the state department said China setting up an online system for reporting “Taiwanese independence” advocates is an “irresponsible and reprehensible” act, a US government spokesperson said on Friday. “China’s call for private individuals to report on alleged ‘persecution or suppression’ by supposed ‘Taiwan independence henchmen and accomplices’ is irresponsible and reprehensible,” an unnamed US Department of State spokesperson told the Central News Agency in an e-mail. The move is part of Beijing’s “intimidation campaign” against Taiwan and its supporters, and is “threatening free speech around the world, destabilizing the Indo-Pacific region, and deliberately eroding the cross-strait status quo,” the spokesperson said. The Chinese Communist Party’s “threats
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