Asian stocks and US futures advanced on speculation governments will step up efforts to revive economies and after the Wall Street Journal reported Citigroup Inc may be sold.
Bank of East Asia Ltd gained 4.9 percent after Hong Kong’s monetary authority said China branches of the city’s lenders can receive liquidity from the mainland’s central bank. Mizuho Financial Group Inc, Japan’s second-largest bank, climbed 14 percent on optimism a merger between Citigroup and a rival would reduce risk in the financial system. Fortescue Metals Group Ltd jumped 40 percent on a profit report.
“The best stimulus out there is for governments to spend,” said Jonathan Ravelas, a strategist at Banco de Oro Unibank Inc in Manila, which manages more than US$6 billion.
A Citigroup merger would “avert a collapse, which the financial system and investors wouldn’t want to hear at this stage,” he said.
The MSCI Asia-Pacific Index added 2.9 percent to 77.37 at 7:11pm in Tokyo, erasing a 2.3 percent retreat. Finance companies were the biggest contributor to the gain. Friday’s advance pared the weekly retreat to 6.9 percent.
Futures on the US Standard & Poor’s 500 Index added 4.3 percent. US stocks tumbled on Thursday, with the S&P 500 dropping 6.7 percent to its lowest in 11 years, as economic data pointed to a worsening recession and lawmakers postponed a vote on a plan to salvage the auto industry.
MSCI’s Asian index has plunged 51 percent this year as global financial companies’ losses and writedowns from the collapse of the US subprime-mortgage market neared US$1 trillion, eventually toppling Lehman Brothers Holdings Inc. Rallies have fizzled — most recently a 25 percent gain posted in the seven trading days following Oct. 27 — as the economies of the US, Japan and the euro-zone entered recession.
Shares on the MSCI gauge are now valued at 9.5 times trailing earnings after falling to as low as 8.2 times last month. That compares with 19.5 times on Nov. 11 last year, when the measure hit a peak of 172.32. Prior to the current market turmoil, it never dropped below 10, Bloomberg data dating back to 1995 show.
TAIPEI
Taiwanese share prices are expected to stage a technical rebound next week on hopes that investors continue to take advantage of cheap electronics, dealers said on Friday.
With the US Thanksgiving holiday coming, Wall Street is likely to turn quiet next week to leave the local bourse breathing space after recent steep declines, they said.
But concerns over domestic an global economic conditions are expected to cap the upside.
For the week to Friday, the weighted index closed down 281.60 points, or 6.32 percent, at 4,171.10 after a 6.11 percent decline a week earlier.
The market made a comeback on Friday, closing up 1.98 percent, as bargain-hunting reversed early heavy losses.
“The market just kicked off a rebound and with depressed share prices, the momentum is unlikely to stop here,” Mega Securities (兆豐證券) analyst Alex Huang (黃國偉) said.
Huang said the bellwether electronics sector was likely to take the lead in the upside.
TOKYO
Japan’s Nikkei stock index closed up 2.7 percent on Friday.
The Nikkei climbed 207.75 points to end at 7,910.79. The TOPIX index of all first section issues rose 20.41 points, or 2.6 percent, to 802.69.
HONG KONG
Hong Kong share prices closed 2.9 percent higher on Friday. The benchmark Hang Seng Index rose 360.64 points to 12,659.20.
CASH Asset Management fund manager Patrick Yiu said the local market was boosted by speculation that China will introduce more pro-market measures and ease monetary policy over the weekend.
Yu said that if there are no such measures this weekend, the local market is likely to fall on profit-taking tomorrow.
KUALA LUMPUR
Malaysian share prices closed 0.2 percent higher. The Kuala Lumpur Composite Index rose 1.56 points to close at 866.88.
JAKARTA
Indonesian shares ended 0.8 percent lower. The Jakarta Composite Index dropped 8.69 points to 1,146.28.
MANILA
Philippine share prices closed 4.14 percent lower. The composite index was down 76.43 points at 1,765.90 points.
WELLINGTON
New Zealand share prices closed 2.52 percent lower. The benchmark NZX-50 index fell 66.57 points to close at 2,578.10.
MUMBAI
Indian shares rose 5.49 percent. The benchmark 30-share SENSEX rose 464.2 points to 8,915.21.
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