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.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College