Asia stocks up amid optimism about Chinese economy

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(Agencies)
Updated: 2009-02-05 14:59

HONG KONG – Most Asian stock markets rose Thursday, with Hong Kong's index up almost 3 percent, amid growing optimism China's government measures will help its economy weather the global slowdown.

Investors walk past the stock price monitor at a private securities company Friday, January 23, 2009, in Shanghai, China. Most Asian stock markets rose Thursday, with Hong Kong's index up almost 3 percent, amid growing optimism China's government measures will help its economy weather the global slowdown. [Agencies]

Investors, shrugging off more downbeat results from major companies in Asia and the US, seemed focused instead on data suggesting China was faring better than expected despite slumping demand for its exports.

Reports released Wednesday showed Chinese manufacturing activity, while still shrinking, was contracting at a slower pace and rebounding from last year's lows.

Media reports that bank lending grew robustly last month added to optimism that massive stimulus measures, including spending and monetary easing, were starting to see results in China's economy, the world's third largest and one of the engines behind Asian growth.

With corporate and economic trouble growing by the day, the session's advance demonstrated just how starved investors were for positive news, analysts said.

"Markets are relieved that the extremely pessimistic scenario hasn't materialized, that the economy hasn't collapsed," said Dariusz Kowalczyk, chief investment strategist for SJS Markets in Hong Kong. "Right now people are hanging on to any signs of hope."

Japan's Nikkei 225 stock average slipped 15.15 points, or 0.2 percent, to 8,023.79. Hong Kong's Hang Seng climbed 350.81 points, or 2.7 percent, to 13,414.70, while the Shanghai Composite Index rose 1.8 percent to 2,145.13.

Elsewhere, South Korea's Kospi rose 0.2 percent, Singapore's main index advanced 0.4 percent.

The move upward bucked trade in the US, where bleak earnings from major companies such as Kraft Foods, Walt Disney and Time Warner sent stocks lower.

The Dow fell 121.70, or 1.5 percent, to 7,956.66, as did broader indicators. The Standard & Poor's 500 index fell 6.28, or 0.8 percent, to 832.23, and the Nasdaq composite index slid 1.25, or 0.1 percent, to 1,515.05.

Oil prices were up slightly in Asia trade, with light, sweet crude for March delivery trading up 14 cents at $40.46 a barrel on the New York Mercantile Exchange. The contract dropped 46 cents to settle at $40.32 overnight.

The dollar was little changed at 89.48 yen, compared to 89.45 yen. The euro also was mostly flat at $1.2843 versus $1.2838.