Asian Markets Rally, Hong Kong Soars Over 6%
Asian markets climbed Tuesday following news of JPMorgan's raised bid for Bear Stearns . Expectations for a recovery in U.S. credit markets cheered investors. Hong Kong stocks jumped over 6 percent and Japan finished over 2 percent higher.
Financial stocks across the region including, Citibank's Japan listing, South Korea's Hana Financial, Australia's Babcock & Brown, and Hong Kong's Bank of China jumped on news of JPMorgan's sweetened offer for Bear Stearns, which signaled there was more value in financial assets than previously thought. JPMorgan lifted its all-stock offer for Bear Stearns to about $10 a share from $2.
Australia's S&P/ASX 200 Index gained 3.7 percent, led up by financial firms such as Macquarie Group. Commonwealth Bank of Australia, which said it will book a pre-tax gain of about A$355 million (US$323 million) from the float of credit card firm Visa, added 8 percent. Mining firms such as BHP Billiton also recovered after suffering hefty losses in the previous session, providing an added lift to the market.
Tokyo's Nikkei 225 Average finished 2.1 percent higher as Canon and other exporters climbed with the yen trading well off a near 13-year high posted last week against the dollar, easing some concerns about exporters' earnings outlooks. Mitsui & Co rose after the Nikkei business daily said the trading house would participate in a power and water desalination project in Qatar. Nippon Steel rose after the same paper said the steelmaker planned to spend 500 to 600 billion yen ($5 to $6 billion) to build a steel factory in Brazil.
South Korea's KOSPI closed up 1.19 percent led by exporters, as improving earnings outlooks for exporters such as Samsung Electronics boosted foreign investors' appetite for beaten down stocks. LG Electronics also advanced.
Hong Kong stocks leapt over 6 percent on the market's return after an extended holiday and on the sweetened Bear Stearns offer, with heavyweight China Mobile jumping 8 percent.
Singapore's Straits Times Index rose 2.5 percent after a Wall Street rally boosted by
JPMorgan's raised buyout offer for Bear Stearns and positive U.S. housing data. United Overseas Bank and Singapore Exchange were leading the advance.
China's Shanghai Composite Index closed flat after sliding to near a nine-month low, led by large caps such as PetroChina and Minsheng Bank, on concern that first-quarter earnings growth would slow.