- The Washington Times - Monday, March 16, 2009

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

Still, lackluster trade outside of the region’s two biggest markets _ Japan and Hong Kong _ reflected investor uncertainty after last week’s rally that was spurred 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. Also buoying optimism about financials 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 many investors were holding back to see whether the Wall Street would extend its four-day rally. Traders were waiting for 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.

“Outside the frenetic activity in Japanese financials, the rest of the markets in Asia seem to be playing a wait and see game,” said Kirby Daley, senior strategist at Newedge Group in Hong Kong. “Investors are happy to ride a bear market rally, but many are not fully confident that anything of significant has changed. There’s a lack of conviction.”

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 120.51, or about 1 percent, at 12,646.31.

Benchmarks in South Korea, Australia and India were mostly unchanged. In the Philippines, the key index tumbled 4.7 percent, while Thailand’s market was down nearly 1 percent.

In mainland China, Shanghai’s main index clawed back from earlier losses to rise about 1 percent.

Friday in New York, 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.

U.S. stock index futures pointed to a lower open on Wall Street Monday. Dow futures were down 24 points, or 0.3 percent, while S&P; 500 futures were down 5.9 points, or 0.8 percent.

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 strengthened to 98.23 yen from 97.91 yen late Friday. The euro fell to $1.2907 from $1.2927.

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