Asian stock markets extend gains after G20 pledge
Asian stock markets climbed modestly Friday after the world's major powers pledged more than $1 trillion to combat the global economic crisis and China's hard-hit factories showed signs of new life.
European markets opened lower.
Gains across Asia were somewhat subdued as caution began to set in before a key U.S. employment report Friday following a spectacular rally that's lifted leading markets from Japan to New York by double-digit percentages over the last four weeks.
The latest catalyst came Thursday as the Group of 20 industrial and developing nations promised $1.1 trillion to the International Monetary Fund and other development bodies to lend to less well-off countries reeling from the global economic turmoil. They also vowed new efforts to clean up banks' tattered balance sheets, shut down tax havens and tighten financial regulations.
Investors, their expectations for any meaningful progress low, cheered the moves — the latest as governments everywhere bring unprecedented resources to bear against the worst economic slump since the Great Depression.
"There was a fear at the G20 was going to turn out to be damp squid and it appears instead there was some unity and progress," said Miles Remington, head of Asian sales trading at BNP Paribas Securities in Hong Kong.
Also boosting sentiment were new figures showing Chinese manufacturing expanded slightly in March for the first time in six months. The data supported hopes the Chinese economy — the world's third-largest and a key source of demand for other Asian countries — is nearing a bottom.
Decline in Europe
Europe defied Asia's upward trend, with Britain's FTSE 100 down 0.3 per cent, Germany's DAX 100 off 0.4 per cent and France's CAC-40 losing 0.5 per cent.
Wall Street futures were slightly lower, suggesting U.S. markets might give back some of their solid gains from Thursday, as anxious investors awaited a critical report on nationwide job cuts.
Dow futures fell 38 points, or 0.5 per cent, to 7,920 and S&P500 futures shed 4.5 points, or 0.5 per cent, to 831.
Earlier in Asia, Japan's Nikkei 225 stock average added 30.06 points, or 0.3 per cent, to 8,749.84, but traded well off its highs.
Hong Kong's Hang Seng edged up 23.72, or 0.2 per cent, to 14,545.69. South Korea's Kospi rose 0.5 per cent to 1,283.75.
Stock measures in Australia, Taiwan and Singapore gained about one per cent or more. But Shanghai's key index, after trading in the green, closed down 0.2 per cent.
Carmakers continued to race ahead, with Toyota Motor jumping 7.2 per cent and Nissan Motor up 5.9 per cent. Resource firms like Australia mining heavyweight BHP Billiton Ltd., up 3.7 per cent, also struck gold.
Overnight in New York, Wall Street's buying spree showed no signs of slowing as investors took comfort in an accounting rule change that will help banks pare their massive losses on bad assets.
Sentiment got a further boost from still more positive U.S. economic data, this time highlighting a large increase in factory orders in February. That followed better-than-expected readings on pending home sales, manufacturing activity and auto sales the day before.
The Dow Jones industrial average gained 216.48, or 2.8 per cent, to close at 7,978.08, posting its best four weeks since 1933.
Broader market indicators also rose sharply, with the Standard & Poor's 500 index up 23.30, or 2.9 per cent, to 834.38.
Oil hovered around $52 a barrel Friday in Asia after surging overnight on investor optimism crude demand will soon rebound if the U.S. recession has bottomed. Benchmark crude for May delivery fell 53 cents to $52.10. The contract rose $4.25 overnight to settle at $52.64.