World stocks lifted by Wall Street rally | The Daily Star
12:00 AM, February 05, 2008 / LAST MODIFIED: 12:00 AM, February 05, 2008

World stocks lifted by Wall Street rally

Asian and European stock markets rose on Monday, supported by a pre-weekend rally for Wall Street on hopes the US economy may avoid a recession after US interest rates were slashed.
Microsoft's huge takeover bid for Yahoo at the end of last week galvanised buying interest in stocks that spread from New York to Asia and helped more than offset Friday's unexpectedly weak US jobs data, dealers said.
They said that after recent heavy losses, investors were eager to pick up bargains.
Chinese share prices jumped 8.13 percent on Monday, the biggest single-day gain in two and a half years, also supported by news that the domestic securities regulator had approved two new stock funds.
Elsewhere the gains were less spectacular but most markets still turned in a solid performance.
Tokyo ended up 2.69 percent, Seoul rose 3.4 percent and Hong Kong closed 3.8 percent higher.
"The rebound is very strong, with those who suffered most in the recent sell-offs leading the way," said Park Mun-Kwang, an analyst at Hyundai Securities in Seoul.
There was optimism that stocks may be able to extend the recovery.
"The trend can continue for, say, a few more weeks," said Soichiro Monji, chief strategist at Daiwa SB Investments in Tokyo.
In European trading nearing the halfway stage, London was up by 0.21 percent. Frankfurt gained 0.97 percent and Paris climbed by 0.68 percent.
"Right now we are catching up with what has taken place in Asia and in the US," Sal.Oppenheim analyst Matthias Joerss said regarding the Frankfurt market.
Investors were cheered by gains on Wall Street where US stocks rose Friday on news of a blockbuster 44.6-billion-dollar bid by Microsoft for Yahoo.
The move helped to offset worries about unexpectedly weak US employment figures. The US economy lost 17,000 jobs in January, the first drop in more than four years and contrary to forecasts for a gain of some 70,000.
Takeover activity also provided a lift for Sydney, which ended up 0.4 percent on Monday amid excitement about a potential takeover battle for Rio Tinto.
Aluminium Corp of China, or Chinalco, and US miner Alcoa Inc on Friday combined to buy a 12 percent stake in the world's third-largest miner. The move came after BHP Billiton made an unsolicited takeover bid for Rio Tinto which was rejected.
In Hong Kong, stocks were supported by speculation that China would avoid taking further measures to try to rein in economic growth in the wake of severe snowstorms that have hit the mainland.
"Sentiment has improved a lot following gains overseas. China may refrain from tightening its monetary policy even further because of the snowstorm," said Alex Tang, research head at Core Pacific-Yamaichi.
On the foreign exchange market, the dollar edged higher against the yen as the Wall Street rally whet investors' appetite for risk.
But the dollar lost ground against the euro as traders bet that the European Central Bank (ECB) would leave its key interest rate unchanged at a meeting later this week rather than opting for a cut.
The Bank of England was expected to lower British borrowing costs by a quarter-point to 5.25 percent on Thursday.
Last week, the US Federal Reserve stepped up its campaign to head off recession with another half-point cut to interest rates.
The drop in the federal funds rate to 3.0 percent came last Wednesday, just eight days after an emergency cut of 0.75 percentage points in the face of a global stock market rout on concerns that the world's biggest economy was sinking fast.

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