Asian Stocks Snap Five-Day Plunge


Asian stocks rose, snapping a five-day plunge, on speculation global interest-rate cuts may stimulate economic growth.

Sony Inc. jumped 6.3 percent and Nintendo Co. surged 13 percent. Newcrest Mining Ltd. and Lihir Gold Ltd., the two largest gold-mining companies on the Australian exchange, jumped more than 10 percent after the price of the metal climbed.

The MSCI Asia Pacific Index advanced 1.2 percent to 92.44 as of 10:59 a.m. in Tokyo, ending a five-day, 16 percent slump. The measure fell 7.4 percent yesterday, the most since April 1990.

Japan's Nikkei 225 Stock Average rose 0.8 percent to 9,275.27. Yesterday it tumbled 9.4 percent, the most since global markets crashed in October 1987. Indonesia's market is suspended from trading following yesterday's 10 percent plunge.

The S&P/ASX 200 Index dropped 72.10 points, or 1.6 percent, to 4,316 at 11:20 a.m. in Sydney, the lowest in more than three years.

On Wendesday U.S. stocks fell for a sixth day after Treasury Secretary Henry Paulson said more banks may fail and unprecedented global interest-rate cuts failed to convince investors the economy will avoid a recession.

Bank of America Corp. slumped 7.7 percent after selling shares at a discount to shore up capital. Alcoa Inc., the largest U.S. aluminum producer, slid 13 percent as a reduction in manufacturing caused by the credit crisis left the company with earnings that trailed analyst estimates. Russia, Indonesia, Ukraine and Romania shut their exchanges and Brazil's benchmark index fell to the lowest level in two years in the worst week for emerging markets in at least two decades.

The S&P 500 swung between gains and losses at least 20 times today, ending down 12.05 points, or 1.2 percent, at 984.18, its lowest since August 2003. The Dow Jones Industrial Average tumbled 194.26, or 2.1 percent, to 9,252.85. The Nasdaq Composite Index decreased 0.8 percent to 1,740.33. Five stocks fell for every two that rose on the New York Stock Exchange.

Canadian stocks were the only winner of global interest rate cuts. The Standard & Poor's/TSX Composite Index rose 2.3% percent to 10,055.20.

Brazilian stocks fell for a fifth day, led by pulp producers and utilities, on concern the weaker real will reduce earnings and interest-rate cuts by six central banks won't prevent the global economy from entering a recession. The Bovespa index slid 947.78, or 2.36 percent, to 39,192.07 at the close.

European equities failed to hold gains inspired by a co-ordinated emergency interest rate cut  from the world’s leading central banks on Wednesday. Frankfurt’s Xetra Dax shed 6.25 per cent to 4,993.60, the CAC 40 in Paris lost 6.65 per cent to 3,484.12.

U.K stocks failed to hold gains inspired by a co-ordinated emergency interest rate cut by the world’s leading central banks on Wednesday, with resource stocks exerting pressure on the index amid concern about the outlook for global economic growth. The FTSE 100 closed 238 points lower at 4,366.7, a loss of 5.2 per cent. The FTSE 250, seen as more representative of the domestic UK economy, was 3.1 per cent weaker at 7,200.9.

Russian authorities closed the Micex Stock Exchange for two days as a new $36 billion injection into the banking system by President Dmitry Medvedev failed to halt the country's biggest stock collapse since 1998. The Micex Index plunged for a sixth day, falling 14 percent to 637.87, the lowest level in more than three years, before trading was halted at 11:05 a.m. in Moscow.


TradingEconomics.com, Bloomberg
10/8/2008 7:38:18 PM