China sparks markets
Written by Writer on Tuesday, November 11th, 2008
China sparks markets
Most Asian stock markets staged strong rallies Monday, with Japan’s key Nikkei 225 Stock Average closing above the 9,000-point threshold, following the announcement of an economic stimulus package by the Chinese government - but the Thai market dipped.
The Nikkei index soared 498.43 points, or 5.81 per cent, to close at 9,081.43.
The Stock Exchange of Thailand index dropped 7.37 points to finish at 456.44.
The broader Topix index of all first-section issues was also up 37.65 points, or 4.28 per cent, to 916.65.
Hong Kong stocks rose by 3.52 per cent as investors reacted positively to the 600 billion-US-dollar economic stimulus package for the Chinese economy announced by Beijing.
The blue-chip Hang Seng Index consolidated a 3 per cent rise in share prices on Friday with a 501.2-point rise to close the day at 14,744.63.
In early trading, the market soared by 5.5 per cent to break through the 15,000-point barrier before falling back later in the day. Turnover was 60.7 billion Hong Kong dollars (7.83 billion US dollars).
Analysts said the rise in share prices was due to China’s economic stimulus package aimed at helping industries hit by the global slump. Shares in some Chinese companies saw double-digit percentage rises.
Shares on mainland China’s main stock market jumped by more than 7 per cent in another positive reaction to the government’s move to stimulate domestic demand and buffer the economy against the effects of the global financial crisis.
The key Shanghai Composite Index, which measures shares traded in local and foreign currencies, gained 127.09 points, or 7.27 per cent, to end the day at 1,874.80.
The smaller Shenzhen Composite Index also soared by more than 6 per cent as combined turnover in the two markets nearly doubled to 78.636 billion yuan (11.52 billion dollars) from 40.2 billion yuan on Friday.
The government on Sunday said it would spend an estimated 4 trillion yuan (588 billion dollars) on infrastructure projects, reduce some taxes and loosen bank lending requirements.
The package would finance 10 major infrastructure programmes over the next two years, including transportation, rural projects, low- cost housing, environmental projects and post-disaster reconstruction, it said.
Other measures include loosening lending rules for commercial banks and a reform of value-added taxes that would reduce the tax bills of companies by an estimated 120 billion yuan (17.6 billion dollars).
Shares also soared Monday on the Seoul stock exchange, led by steel and machinery stocks which got a boost from China’s stimulus package.
The benchmark Kospi index surged 17.97 points, or 1.6 per cent, to close at 1,152.46.
The main index of the technology-heavy Kosdaq market rose 6.63 points to 322.17.
Indian equity indices rose by over 3 per cent in early trading, trailing the rally in Asian markets.
The Bombay Stock Exchange’s 30-share sensitive index Sensex was trading at 10,298.45 around noon, about 3.35 per cent above its previous close.
The broader 50-share S&P CNX Nifty of the National Stock Exchange was hovering around 3,076.75 about 3.49 per cent above Friday’s close. (dpa)
Bangkok Post
Monday November 10, 2008
