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Bangkok
05 January 2009
After a dismal 2008, Asian stocks closed higher Monday - the first trading session for many markets in 2009. Analysts say the gains came from optimism that U.S. and Asian economic stimulus packages will ease the global recession.
Investors in Asia started the new trading year buying stocks, encouraged by government spending plans at home and in the United States.
Investors welcomed President-elect Barack Obama's proposed $310 billion in tax cuts, which they hope will boost consumer spending. Slowing U.S. demand hurts Asian export industries, and governments around the region are trying to cushion the impact.
But Kavee Chukitkasem, stock strategist at Kasikorn Securities in Bangkok, says the market optimism over the stimulus plans is unlikely to last.
"We recommend investors to take profits after ?because the world economy is deeply damaged, it's impossible to have a recovery in the short term," Kavee said. "Right now, everybody is trading with the hope that the package[s] will boost the economy."
Shanghai's Composite index rose more than three percent to 1,880, on Prime Minister Wen Jiabao's pledge to implement new measures to help the steel and auto industries. Baoshan Iron & Steel, China's biggest steelmaker, was up 7.5 percent.
In Japan, the Nikkei 225 index jumped two percent to 9,043 - its highest in two months. Prime Minister Taro Aso proposes $52 billion in additional spending to halt a recession in the world's second largest economy.
Mumbai's Sensex traded higher, boosted by interest rate cuts and a second stimulus package announced Friday.
In Hong Kong, the Hang Seng index climbed 3.5 percent.
Stocks in Thailand also traded higher, with investors optimistic the newly installed government will focus on boosting the economy and restore stability after last year's political turmoil.
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