HONG KONG (AP) - Asian stock markets surged Tuesday, with
Japanese shares jumping over 4 percent, after Wall Street staged a
massive rally as news that Citigroup is turning a profit buoyed
hopes the stricken financial sector can recover.
The region's lurch higher, led by banking shares, was a welcome
reprieve from the depressing declines in global equities over the
last few weeks.
But the relief was likely to be temporary as stocks, in the
throes of the worst bear market in years, continue to grind lower
in the coming months in search of a bottom.
"What you've seen today is mostly a technical bounce in markets
after falling steeply recently, and I don't think this rally can be
sustained," said Arjuna Mahendran, the Singapore-based head of
Asian investment strategy for HSBC Private Bank, which manages some $494 billion in assets. "It's still far too early to predict that
the global recession is over ... The fundamentals are simply not in
The catalyst was a letter from Citigroup Chief Executive Vikram
Pandit to employees saying the bank had operated at a profit for
the first two months of this year, logging its best performance
since the third quarter of 2007, the last time it booked a
Investors, desperate for any positive signs about the ailing
financial system, cheered the news about the banking giant, which
has lost so much money the government has been forced to extend
billions in aid and take a 36 percent stake.
Japan's Nikkei 225 stock average shot up 312.67 points, or 4.4
percent, to 7,367.65, rebounding from a 26-year closing low hit
this week. Hong Kong's Hang Seng leapt 340.72 points, or 2.9
percent, to 12,034.77.
Elsewhere, South Korea's Kospi rose 33.05, or 3 percent, to
1,124.80. Australia's benchmark added 2 percent, Singapore's stock
measure was up 1.8 percent and Taiwan's index advanced 2.3 percent.
Banking shares were especially strong, with leading Japanese
bank Mitsubishi UFJ Financial Group Inc. up 6 percent. HSBC, which
like Citi gave reassurances this week that it was performing better
than expected so far this year, advanced 6 percent in Hong Kong,
continuing its recovery form a 24 percent plunge on Monday.
The upbeat mood, though, belied more evidence that Asian
countries were still suffering from the drought in Western demand
that drives their export-reliant economies.
In China, exports plunged 25.7 percent last month as overseas
appetites for goods made in the world's third-largest economy
continued to deteriorate. Japanese machinery orders, an indicator
of how much the country's companies are spending, fell 3.2 percent
in January, though were still better than expected.
In the U.S., Federal Reserve chairman Ben Bernanke warned the
U.S. recession wouldn't end this year unless the government bailout
of banks succeeded and financial markets were restored to working
Overnight, Wall Street posted its best performance of the year,
with the Dow Jones industrials surging 379 points, or about 5.8
percent, to 6,926.49. The broader Standard & Poor's 500 index
pushed higher by 43.07 points, 6.4 percent, to 719.6.
Stock futures pointed to modest gains on Wall Street. Dow
futures rose 46, or 0.7 percent, to 6,933 and S&P500 futures
advanced 4.5, or 0.6 percent, to 720.50.
Oil prices were steady in Asian trade, with Light, sweet crude
for April delivery up 4 cents at $45.75 a barrel on the New York
Mercantile Exchange. The contract fell $1.36 to settle at $45.71 a
The dollar weakened to 98.43 yen from 98.80 yen. The euro was
weaker at $1.2655 from $1.2702.