WORLD> Asia-Pacific
Asian stocks extend gains after Wall Street rally
(Agencies)
Updated: 2008-10-29 14:20

HONG KONG – Asian stock markets extended a global rally Wednesday after an overnight surge on Wall Street as investors awaited possible interest rate cuts from central banks in the US and Japan.


Traders watch terminals as Japan's Nikkei 225 stock index shoots up over 7 percent in early trade Wednesday, Oct. 29, 2008, after big gains overnight in the US The benchmark index rises 540.82 points to 8,162.74 after about an hour of trading. [Agencies] 
Tokyo's Nikkei 225 index jumped 526.99, or 6.9 percent, to 8,148.91, building on a similar advance in the prior session.

In Hong Kong, the Hang Seng Index added 4.7 percent to its spectacular 14.4 percent rise the day before. South Korea's benchmark rose 2.5 percent, while Australia's S&P/ASX200 trader 3.7 percent higher.

Investors were heartened by an overnight rally on Wall Street, where the Dow Jones industrial average soared nearly 900 points, or 10.88 percent, to 9,065.12 to its second-largest point gain following rises in Asian and European markets earlier in the day.

The US Federal Reserve is expected to cut its target fed funds rate by half a point to 1 percent on Wednesday. Markets also were holding out hope the Bank of Japan would trim its interest rate — already at a low 0.5 percent — when it meets Friday.

"The optimism is fueled by the prospect of rate cuts," said Singapore-based investment analyst Nicole Sze of Bank Julius Baer & Co., which manages about US$300 billion in assets. "Wall Street's rally brought some extra confidence to the market, reminding investors that selling might have been overdone and this might be a good time to pick some values."

"Having said that, this doesn't necessarily signify the absolute bottom and that things will be rosy from here," he said.

A weaker yen also prompted investors in Tokyo to buy exporters like Toyota Motor Corp., which was up 9.5 percent. Honda Motor Co. jumped 16 percent even though on Tuesday it reported a 41 percent drop in quarterly profit and lowered its forecast for the full year.

On Tuesday, the dollar leaped to 97.68 yen from 93.93 yen late Monday — and as low as 91 yen on Friday. A strong yen erodes exporters' overseas earnings. In Asian trading Wednesday, the dollar was down a bit at 96.92 yen.

Japanese financials also rose, with megabank Mitsubishi UFJ Financial Group Inc. surging 11.7 percent.

In South Korea, Samsung Electronics Co. rose 6.7 percent.

Oil prices rose. Light, sweet crude for December delivery advanced $2.07 to $64.80 a barrel in Asian trade on the New York Mercantile Exchange. The contract slid 49 cents overnight to settle at $62.73, the lowest closing price since May 15, 2007.

In Europe Tuesday, Germany's DAX gained 11.3 percent and France's CAC-40 added 1.6 percent. The FTSE 100 index of leading British shares closed 73.79 points, or 1.9 percent.