- The Washington Times - Monday, March 16, 2009

HONG KONG (AP) - Asian stock markets advanced for a second day Monday, with Tokyo’s index up nearly 2 percent, on cautious optimism that government pledges to heal the financial system and spur growth will reinvigorate the flagging world economy.

Still, erratic trade through most of the session outside the region’s two biggest markets _ Japan and Hong Kong _ reflected lingering uncertainty after a rally last week triggered by upbeat news about Citigroup and other top U.S. banks.

In Japan, financial stocks surged on reports the country’s central bank may buy their subordinated loans and bonds to bolster their capital. Helping easing fears about banks were promises over the weekend from finance ministers of Group 20 nations to do “whatever is necessary” to fix the global economy and restore a shaky financial sector still reeling from losses on bad assets.

But sentiment was still fragile as traders waited to see whether Wall Street would extend its four-day rally. Investors also were anticipating announcements this week from the U.S. Federal Reserve and Treasury Department about the state of the world’s largest economy and the government’s bank bailout plan.

“Investors are happy to ride a bear market rally, but many are not fully confident that anything of significance has changed,” said Kirby Daley, senior strategist at Newedge Group in Hong Kong.

Japan’s Nikkei 225 stock average rose 134.87 points, or 1.8 percent, to 7,704.15, after vaulting more than 5 percent on Friday. Hong Kong’s Hang Seng climbed 450.91, or about 3.6 percent, at 12,976.71.

In mainland China, Shanghai’s main index clawed back from earlier losses to rise about 1 percent. Taiwan, Indian, Australia and Singapore stock measures also rose.

South Korea’s benchmark was mostly flat, while the Philippines’ stock measure tumbled 4.7 percent.

Financials posted strong gains across the region.

In Japan, megabanks like Sumitomo Mitsui Financial Group, Inc., up nearly 6 percent, surged on a report by the country’s main business paper about the central bank’s possible plan to buy the banks’ loans and bonds to boost their capital.

European heavyweight HSBC, listed in Hong Kong, climbed 4.6 percent after its chief financial officer said the company would not need money from the British government.

Asia’s major exporters also were higher, with Hyundai Motor gaining 3.3 percent in South Korea and electronics giant Canon Inc. up 4.8 percent on the back of a weaker yen.

Trade was choppy in many markets but stabilized later in the day after U.S. stock index futures pointed to more gains on Wall Street. Dow futures and S&P; 500 futures were both higher.

Friday in New York, Wall Street finished with its biggest weekly advanced since November. The Dow Jones industrial average rose 53.92, or 0.8 percent, to 7,223.98, bringing its weekly gain to a stunning 9 percent. The Standard & Poor’s 500 index rose 5.81, or 0.8 percent, to 756.55.

On Sunday, Federal Reserve Chairman Ben Bernanke said America’s recession “probably” will end this year if the government succeeds in bolstering the banking system.

In oil, crude prices fell below $45 a barrel in Asia on Monday after OPEC decided not to cut production levels at its meeting over the weekend in Vienna. Benchmark crude for April delivery was off $1.84 to $44.41 a barrel by midmorning in Singapore on the New York Mercantile Exchange.

In currencies, the dollar traded higher at 98.07 yen from 97.91 yen late Friday. The euro rose to $1.2940 from $1.2927.

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