Asia-Pacific markets surge on China stimulus

Business Materials 10 November 2008 10:18 (UTC +04:00)

Asian and Pacific markets surged on Monday as China announced a $570 billion stimulus package to offset declines in its economy, reported CNN.

The upsurge was most noticeable in Tokyo where the Nikkei index had gained 5.3 percent by the midday break.

Chinese markets responded positively, as well. Hong Kong's Hang Seng was up 3.3 percent, with the Shanghai index jumping 5 percent. Australia's All Ordinaries was up more than 1 percent.

In Mumbai, the BSE SENSEX was up 2.4 percent in early trading.

The response was more muted in other parts of the region.

The Taiwan Weighted was down about 0.3 percent, while Singapore's Straits Times index was flat.

The Chinese stimulus package includes loosening of credit restrictions, tax cuts and a massive infrastructure spending program, according to China's Xinhua news agency.

The money will be spent over the next two years to finance several areas, including low-income housing, technological innovation and rebuilding from several disasters -- namely the May 12 earthquake in Sichuan province that killed nearly 70,000 people.

The plan was approved Sunday by the State Council.

The growth in China's economy slowed for the first nine months of 2008 compared to the same period last year, officials reported in late October, but still increased by nearly 10 percent.

Wall Street closed Friday on a positive note, with the major indices all gaining 2 to 3 percent after two days of selloffs.

U.S. futures, which offer an indication of how markets may open when trading begins in New York on Monday, were higher.

European markets also closed the week on a positive note.

The continent's major indices -- London, Paris and Frankfurt -- added 2 to 3 percent.