Asia markets rallied sharply Monday, with investors taking heart from a rescue plan for U.S. automakers and hopes that the sharp drop in oil prices will ease some of the pain for households facing mounting layoffs.
Oil prices gained more than a dollar, climbing above $42 a barrel is providing some relief to the bleak landscape of tightening credit and job losses that are hitting consumers around world. Shares of oil producers fell, with Nippon Oil losing 5 percent.
The dollar slipped as stocks posted gains despite Friday's dismal U.S. jobs report showing 533,000 jobs were lost in November, the most in 34 years and one of the biggest drops ever in the government data.
But a late rally on Wall Street on Friday, led by retail shares, suggested some investors believe the worst may be over after the plunge in stocks this year and a rush to safe-have bonds that has driven benchmark U.S. Treasury yields to half-century lows.
Japan's Nikkei 225 Average closed up 5.2 percent to its highest close in a week, with machinery shares such as Komatsu surging on hopes for economic
stimulus packages being enacted around the world. Additional support came from domestic demand shares such as Eisai and other drugmakers, while exporters rose as shares in other Asian markets gained sharply.
Seoul shares surged 7.5 percent to a near 4-week closing high as hopes of further economic stimulus measures from global governments strengthened, pushing up construction and technology issues. Samsung Electronics, the world's No.1 memory chip maker, jumped 8.67 percent and Hyundai Engineering & Construction rallied 11 percent.
Australian stocks gained 4.1 percent to a one-week closing high, boosted by takeover speculation surrounding energy group Santos, a rally in financial stocks and gains for Qantas Airways. Santos rose 9 percent, having been up as much as 16 percent, following a media
report that China National Petroleum Corp was considering teaming up with an unnamed foreign oil company to make a bid for the group. Qantas was another big gainer, rising 7.2 percent. The group's chief executive Alan Joyce said there were key issues unresolved with regard to its potential merger with British Airways, and that there was a reasonable chance a deal would not go ahead.
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Hong Kong shares soared 8.7 percent to a one-month high, boosted by talk of further measures from China to support banks and markets as well as push up private consumption in the world's fastest-growing major economy. A strong surge in mainboard turnover to HK$35.4 billion by midday compared with just HK$37.3 billion in all of Friday, supported a 16.8 percent rally in shares of bourse operator Hong Kong Exchanges & Clearing.
Index heavyweight China Mobile led gains with a 7.8 percent jump, building on Friday's rally after Merrill Lynch upgraded the stock to buy from neutral and raised its target price to HK$90. Gains were also supported by lower oil prices and the rescue plan for U.S. automakers, both providing some relief to investors shocked by last week's unemployment numbers which showed half a million job losses in the world's largest economy in November.
China's Shanghai Composite Index rose 3.6 percent underpinned by hopes a meeting of top economic planners this week will produce more government action to aid the economy and a rally in Hong Kong shares.
Markets in Indonesia, Malaysia and Singapore are closed for a holiday. They will reopen Tuesday.