09/19/2008, 00.00
ASIA
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Asian markets in net recovery, hopes for American plan

The US Treasury has decided on an emergency plan to stabilise markets. Indexes across Asia soar. But fears remain. The price of gold increases.

Hong Kong (AsiaNews) – Asian stock markets rallied this morning following the decision by US authorities to intervene in the financial crises.

Tokyo’s Nikkei index was up by 3.3%, after crashing to a three year low yesterday.  

Hong Kong’s market was up 6.7%, after a week of losses helped by the Chinese government’s decision to put a halt to the financial crises.  In an attempt to stabilise the market Beijing bought shares in the three biggest state banks and reduced taxes on shares.  As a result Shanghai’s index jumped to 9.4%.

Indexes across the region have registered net gains:  Singapore 4.03%; Seoul 4.62; Taipei 5.59; Manila 4.69; Kuala Lumpur 2.53; Jakarta 3.09.

The positive indexes are also the result of many central banks’ decision to inject substantial quantities of liquidity onto the markets.  , Over the last four days, and twice in one day, the Bank of Japan injected a total of 11 billion Yen.  Europe and the United States have also injected massive quantities of liquidity onto the markets.  Yesterday alone, in a joint effort, the offer topped 180 billion dollars.

But the most significant sign of hope comes from the American Treasury which has announced a “vast plan” to counter “the problem of non liquid assets”, the source of the disaster which brought about the collapse of Lehman Brothers.

It is rumoured that Congress is set to launch a structure called Resolution Trust Corporation to take on the debts created by the mortgage crises.

Many analysts believe that these measures could “at least for a certain period” stabilise the markets. In the interim however, investors are seeking greater security, such buying gold. Yesterday the price of gold was up by 0.8%.

 

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