On most Asian exchanges, stock prices rose this morning for the eighth consecutive day, a trend not seen since October 2007, as investors hope that government stimulus measures worldwide will boost economic recovery.
On the Tokyo Stock Exchange, the Nikkei index jumped 1.7 percent this morning to 9,239 points, the highest level in two months. In South Korea, stock prices rose by more than 2 percent, and increases in stock indices were also recorded in Australia, Taiwan, Singapore… Among the few losers were the exchanges in Hong Kong and Shanghai this morning. Around 7 a.m., the MSCI index of Asia-Pacific stocks, excluding Japan, was up 1.7 percent, marking the eighth consecutive day of growth, reaching the highest level since early November last year.
"Clearly, market sentiment has improved, despite news indicating that the world’s largest economies continue to weaken. The rise in stock prices is attributed to increased liquidity and could continue if uncertainty does not return to Wall Street, as it did last year," says Karen Lin, a fund manager at Paradigm Asset Management in Taiwan. Analysts say that investors have regained their appetite for riskier investments, such as stocks, as they believe that government stimulus measures from the largest countries in the world will revive the economy in the second half of the year.
Japanese media report this morning that the local government is considering a plan to inject fresh capital into more than 40 smaller banks to improve their liquidity and thus stimulate lending, which should ultimately help pull the Japanese economy out of recession. Besides the U.S., where a proposal for measures to revive the largest economy in the world, worth $775 billion, is being prepared, stimulus packages are also being prepared by Indonesia, Thailand, and several other Asian countries.
