- The Washington Times - Wednesday, April 22, 2009

HONG KONG (AP) - Asian stock markets stabilized Wednesday after the U.S. Treasury secretary said most of the country’s hard-hit banks have enough capital to weather the global financial crisis.

A day after veering sharply lower, the region’s markets mostly moved higher in choppy trade with technology shares outperforming but banks largely mixed. The dollar slipped against the yen, while crude oil prices rose.

A number of Asian financials were lackluster even though their Western peers rebounded overnight, reflecting some trepidation the financial industry is still facing pain in the form of massive losses from bad loans.

U.S. Treasury Secretary Timothy Geithner’s assertion that the “vast majority” of banks could be considered well-capitalized was a relief to many investors both in Asia and Wall Street, where stocks rebounded on the news.

But many traders remain leery ahead of the release of results from the U.S. government’s “stress tests” of bank balance sheets. Meanwhile, the International Monetary Fund said U.S. financial firms could suffer $2.7 trillion in losses through 2010 _ nearly double its projection just six months ago _ and the worldwide total could surpass $4 trillion.

Khiem Do, a Hong Kong-based fund manager at Baring Asset Management, said the markets would likely remain stable so long as policymakers continued to intervene.

“Obviously troubles in the banking system are not totally resolved. There will still be more write-offs and other problems,” said Do, who helps oversee about $7 billion of Asian equities. “But if investors know that governments are handling the problems rather than ignoring them they will have more confidence.”

In Tokyo, the Nikkei 225 stock average rose 49.42 points, or 0.5 percent, to 8,752.30, while Hong Kong’s Hang Seng lost 19.24 points, or 0.1 percent, to 15,266.65.

Meanwhile, South Korea’s Kospi rose 1.6 percent to 1,357.88, India’s Sensex traded up 1 percent and Taiwan’s benchmark advanced 0.3 percent. Australia’s market lost ground.

Overnight on Wall Street, the Dow rose 127.83, or 1.6 percent, to 7,969.56.

Broader stock indicators showed the biggest gains. The Standard & Poor’s 500 index rose 17.69, or 2.1 percent, to 850.08, and the Nasdaq composite index rose 35.64, or 2.2 percent, to 1,643.85.

U.S. stock futures pointed to a weak open on Wall Street. Dow futures fell 34 points, or 0.4 percent, to 7,889 and S&P; 500 futures lost 4.2, or 0.5 percent, to 843.50.

Oil prices hovered below $49 a barrel as traders worried that a weekly U.S. crude inventories report will show demand remains weak amid a severe recession.

Benchmark crude for June delivery rose 20 cents to $48.75.The contract Tuesday gained 4 cents to settle at $48.55 a barrel.

In currencies, the dollar weakened to 98.24 yen from 98.55 yen. The euro was lower at $1.2932.

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