Journal-News.com

Asia, Europe stocks rebound after Wall Street rout

BANGKOK, Thailand — Most Asian and European markets rebounded Friday after sharp declines in recent days as investors scooped up battered financial and technology shares.

Major Asian benchmarks opened lower after Wall Street tumbled to multiyear lows overnight but climbed into positive territory in afternoon trading. Oil prices, which had fallen below $49 a barrel to three-year lows in early trading, also bounced back.

(enlarge photo) An employee uses her mobile phone in front of an electronic stock board at the Korea Stock Exchange Market in Seoul, South Korea, Friday, Nov. 21, 2008. The Korea Composite Stock Price Index jumped 55.04 points, or 5.8 percent, to close 1,003.73. (AP Photo/Ahn Young-joon)

"After tanking for so many days there will always be a belief that you just can't draw a straight line down. There may be a day or a day and a half of respite," said Song Seng Wun, head of research at CIMB Securities in Singapore.

"But there is still a lot of uncertainty. If there was some announcement of help for the U.S. auto industry that might buy us some time but the strategy still seems to be to sell into any strength," he said.

Japan's Nikkei 225 stock average rose 207.75, or 2.7 percent, to 7,910.79, helped in part by a weaker yen, and Hong Kong's Hang Seng index jumped 360.64 points, or 2.9 percent, to 12,763.81.

South Korea's Kospi surged 5.8 percent and Australia's market closed up 1.9 percent after initially falling more than 3 percent. But mainland China's Shanghai Composite index slipped 0.7 percent and markets in the Philippines and Indonesia also sank.

In early European trading, London's FTSE-100 index was up 0.6 percent , France's CAC-40 rose 0.7 percent and Germany's DAX gained 0.5 percent.

U.S. stock index futures were sharply higher, suggesting Wall Street would bounce back after a crushing two-day 10.6 percent plunge in the Dow Jones industrial average, its worst two-day percentage loss since October 1987.

Dow futures were up 303 points, or 4 percent, at 7,787 and S&P 500 futures were up 31.9 points, or 4.3 percent, at 780.2.

Wall Street tumbled Thursday as hopes faded that lawmakers would quickly assemble an aid package for U.S. automakers. Stocks were also battered by worries the $700 billion bailout won't be big enough and oil plunging to a three-year low on expectations of a global economic recession.

The S&P 500 index fell 6.7 percent to its lowest close since April 1997. The Dow, meanwhile, fell 445 points, or 5.6 percent, to its lowest close since March 2003.

Oil prices, which have fallen to a third of their July peak, edged up in Asian trading. Light, sweet oil for January delivery rose 20 cents to $49.62 a barrel on the New York Mercantile Exchange after earlier falling as low as $48.25, the lowest since May 2005.

Financial, real estate and technology stocks led the recovery in Asia.

In Hong Kong, HSBC Holdings PCL jumped 4.5 percent, China Construction Bank Corp. was up 6.7 percent, and developer Cheung Kong jumped 5.8 percent.

Japan's Sony Corp. rose 5.6 percent and megabank Mitsubishi UFJ Finance rose 2.5 percent.

In Seoul, Woori Financial Group vaulted 14.5 percent and Shinhan Financial Group gained 8 percent. Taiwan's Semiconductor Manufacturing Company Ltd., the world's largest contract chip-maker, gained 4.6 percent.

"There's a little bit of strength coming back into beaten-down stocks," said Andrew Yates, vice president of foreign institutional sales at Asia Plus Securities in Bangkok. "But the volumes are not great so it's difficult to call a bottom particularly with the macro picture being so weak."

In currencies, the dollar rose to 95.26 yen from 93.79 late Thursday, while the euro rose to $1.2535 from $1.2432.

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