Tech & Biz

Asian stocks rally on economic recovery hopes,Nikkei soars

by Sanjay Jha | January 4, 2009 at 10:38 pm

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Defying all the negative perceptions Stock Markets in Asia rose on Monday at the beginning of the new year. Japan's Nikkei, Indian Sensex took cue from Wall Street. Indian stock market gained momentum on Monday on the back of interest rate cuts by the Central Bank and second stimulus package by the Indian government to boost economy from economic downturn.

Asian stocks rose on Monday, with Tokyo hitting the highest level for almost two months as investors hoped that the US economy would start to recover this year after a dire 2008.

Investors took their cue from Wall Street, where shares soared on Friday on expectations that US president-elect Barack Obama's massive stimulus plan would help to revive the recession-hit economy.

Tokyo's Nikkei-225 index closed 2.07 per cent higher in a half day of trading, its first of 2009, ending above the 9,000-point level for the first time since November 10.

Elsewhere in early trade, stocks climbed 2.0 per cent in Hong Kong, 1.40 per cent in Shanghai, 2.92 per cent in Taipei, 2.06 per cent in Seoul, 1.33 per cent in Singapore and 0.6 per cent in Sydney.

"Stocks are gaining support from the stronger stock market in the United States and expectations of a recovery in the US economy this year," said Makoto Sengoku, a market analyst at Tokai Tokyo Securities.

A weaker yen gave a boost to Japanese exporters, which have been hit hard by the recent strength of the Japanese currency, he said.

Dealers said they were also encouraged to buy shares as fears of a collapse of the US auto industry receded after the US government approved a financial rescue package in December.