Asian Stocks Jump On US Stimulus Plan

Hang Seng, Nikkei and Shanghai lead the regional gain

The stock markets across the Asian region closed to a 3 week high as investors takes a sigh of relief from a rescue plan for US automakers, falling oil prices and more government stimulus measures to limit the economic damages from the credit crisis. On Wall Street the Dow closed up 259.2 points or 3.1% at 8,635.4, the Nasdaq gained 63.8 points or 4.4% to 1,509.3 and the S&P 500 advanced 30.9 points or 3.7% to 876.1.

In the commodity market, crude oil prices rose for the first time in seven days after OPEC president said that the group would announce significant output cuts and U.S President-elect Barack Obama reiterated his pledge of big-bang public spending program in five decades. At 00:53 a.m. ET, oil was quoted at $43 a barrel, up $2.19, after the contract plunged to its lowest level in four years of $40.81 a barrel on Friday in New York trading.

In the currency market, the U.S. dollar strengthened to the upper 92-yen levels in late Tokyo deals. The dollar was quoted at 92.83-92.86 yen, up 0.60 yen from Friday's close of 92.23-92.25 yen in Tokyo.

China's Yuan strengthened to 6.8745 a U.S. dollar in over-the-counter trading, up from Friday's close of 6.88120.

The Australian dollar closed up at US$0.6532-0.6537, compared to Friday's close of US$0.6442-0.6445, on capital inflow into equity market.

The New Zealand dollar finished the domestic session at US$0.5324, down from US$0.5337 late Friday.

The South Korean won finished the domestic session at 1,448.3 to a dollar, down from Friday's close of 1,475.5 to a dollar.

Coming back in equities, Japan’s Nikkei surged 5.20% to its highest close in a week, with machinery shares surged on hopes for economic stimulus packages being enacted around the world. The benchmark Nikkei gained 411.54 points to 8,329.05 after earlier rising as high as 8,358.27. It lost 7% last week. The broader Topix index of all the Tokyo Stock Exchange First Section issues rose 26.06 points, or 3.32%, to 812.08.

On the economic front, the Ministry of Finance said that Japan's unadjusted current account surplus plummeted 56.6% on year in October to 960.5 billion yen compared to analysts' expectations for a 50% decline. The current account surplus has fallen for the eighth straight month in October. The October trade surplus was down 87.2% on year to 145.8 billion yen.

In Mainland China, the stock markets surged to a two month closing high as meeting of top economic planners scheduled this week is likely to produce more government actions to aid the overall economy. The benchmark Shanghai Composite Index jumped 72.12 points or 3.57% to close at 2,090.77. The Shenzhen Composite Index for China's smaller second exchange rose 3.69% or 22.18 points to 622.90.

In Hong Kong, stock prices closed sharply higher, driven mainly by hopes that a key annual Chinese government economic conference will produce more measures to boost the economy and markets. The Hang Seng index closed up 1,198.78 points or 8.66% at the day's high of 15,044.87, off a low of 14,303.25. The Hang Seng China Enterprises index was up 708.91 points or 9.54% at 8,137.45.

The Australian stock market closed sharply higher, reversing Friday's 1.2% losses, as oil producers surged on talk of a potential takeover bid for Santos and banks gained on bargain hunting. The benchmark S&P/ASX 200 index rose 141.70 points, or 4.06% to 3,631.60 and the broader All Ordinaries index gained 126.6 points, or 3.7%, to 3,553.8.

On the economic front, ANZ reported that total job advertisements in Australia fell 8.6% in November, following a 5.9% monthly decline in the previous month.

The New Zealand stock market closed in negative territory for the second straight trading session, despite Wall Street posting sharp gains on Friday. The benchmark NZX 50 Index closed down 6.91 points, or 0.26%, at 2,699.81 and the broader NZX All Capital Index lost 9.9 points, or 0.4%, to 2,722.5.

On the economic front, the average price of houses in New Zealand fell 6.8% in November from a year earlier, the second monthly slide of the same magnitude. The average sale price fell to NZ$375,408 last month, from NZ$379,290 in October, QV Valuations said in a statement. Meanwhile, the Statistics New Zealand reported that the seasonally adjusted volume of residential building work put in place in the September quarter fell 7.9%, the lowest since June 2002.

The South Korean stock market jumped to near 4-week closing high as hopes of further economic stimulus measures from governments around the world strengthened, pushing up construction and technology issues. The Korea Composite Stock Price Index finished up 7.48% at 1,105.05 points, its highest close since the finish of 1,123.86 on 12 November 2008.

On the economic front, major global investment banks lowered their 2009 growth projections for South Korea to near 1%, citing a faster-than-expected worldwide recession and its impact on the nation's export-driven economy. According to the data provided by the Ministry of Strategy and Finance and the Korea Center for International Finance, seven major investment banks including JP Morgan predicted Asia's fourth-largest economy will grow an average of 1.2% next year, far lower than a 3% expansion predicted a month earlier.

In Taiwan, Stock market closed higher in a technical rebound after four successive sessions of losses, boosted by a strong showing on Wall Street on Friday. Taiex, the benchmark index closed up 193.26 points or 4.57% at 4,225.07, off a high of 4,424.09 and a low of 4,225.07. The daily change is the highest since 24 October 2008 when the market jumped by 271.12 points.

In economic news, Taiwan imported 34.50 million barrels of crude oil in October, up 7.8% from the same month last year and more than double the previous month of 2008. According to the Bureau of Energy said October crude oil imports likely benefited from shipments that were delayed from the previous month, as September crude imports fell to nearly a five-year low.

In another release, Taiwan's exports in November fell 23.3% from a year earlier to US$16.78 billion, compared with an 8.3% fall to US$20.81 billion in October, the Ministry of Finance said. Imports in November declined 13.2% year-on-year to US$15.26 billion, after declining 7.0% to US$17.86 billion in the preceding month. Trade in November resulted in a surplus of US$1.52 billion, narrowing from a surplus of US$2.95 billion in October. In the first 11 months of the year, Taiwan had a trade surplus of US$12.94 billion, down 48.7% from a year earlier. Exports in the period rose 8.4% to US$242.02 billion and imports rose 15.7% to US$229.08 billion.

In Philippines, the benchmark index PSEi escalated 1.04% or 19.72 points to 1,908.68, while the All-share index rose 0.55% or 6.59 points to 1,197.35. On the economic front, the producer price index for the manufacturing industry recorded a 6.9 % growth in October 2008, compared with the year ago level. On a month-on-month basis, PPI slightly went down by 0.2 % in October.

In India, slew of measures announced by the RBI and the government over the weekend to minimize the impact of a global slowdown on the Indian economy acted as booster for the regional stock markets. According to the provisional closing the BSE Sensex gained 195.03 points or 2.18% to close the day at 9161.03.

In other regional markets, European shares rallied sharply today morning, with oil majors and banks among the strongest performers. On a national level, the U.K. FTSE 100 index soared 5.8% to 4,285.43, the German DAX 30 index jumped 6.3% to 4,657.39 and the French CAC-40 index advanced 6.8% to 3,191.57.