Seoul
08 December 2008
Stock markets around Asia rallied to a three-week high on news that the United States and other governments are considering bold steps to counter a global economic slowdown.
Stocks rose Monday because of word a deal may be nearing to avert collapse for struggling American carmakers and because of other economic intervention by governments around the world.
Shares jumped 7.5 percent in Seoul, more than five percent in Tokyo and more than seven percent in Hong Kong. The All Ordinaries in Sydney also got a boost of more than four percent.
Han Dong-wook is an analyst with Hyundai Securities, here in Seoul. He says the market rally has to do with some positive signals investors are getting from world capitals.
He says incoming American President Obama's announcements of a forthcoming public-spending plan to rebuild U.S. infrastructure sounds a positive note. He says there are also signs China is getting ready to take an active role in its economy, spending billions to cushion its economy from the global slowdown.
Stimulus efforts are already underway in other countries, including India, South Korea and Australia. Central bankers, around the world, are also seeking to reinvigorate lending that constricted after the failure of several major financial firms in the United States.
Congressional leaders in Washington indicated, this weekend, a deal may be near to extend about $15 billion in emergency loans to the so-called "big three" U.S. auto manufacturers.
Pyo Han-hyeong, a researcher at Seoul's Hyundai Research Institute, says Asian exporters do not want to see the American car industry fail. He says a suffering auto industry is likely to make U.S. policymakers more favorable toward trade protectionism and that would mean Asian manufacturers would sell fewer products in the American market.
Economists warn that a one-day bounce in Asian stock markets should not be interpreted as a sign of a global recovery. They point to dismal U.S. employment figures and predictions from incoming President Obama, himself, that things are likely to get worse before they get better.