Stocks rose in Europe and Asia, sending the MSCI World Index to its biggest gain since July, on speculation the US government’s takeover of Fannie Mae and Freddie Mac will shore up the mortgage market.
UBS AG, the European bank hardest hit by subprime-related losses, and Mizuho Financial Group Inc, Japan’s biggest lender by assets, surged more than 10 per cent after Treasury Secretary Henry Paulson said the government will provide short-term funding to the two biggest US mortgage-finance companies and purchase debt backed by home loans. Citigroup Inc climbed by 5.9 per cent.
| SHANGHAI SURPRISE | |||
| Asian Indices | Sept 8,2008 | Change* | % change* |
| Kospi | 1476.65 | 72.27 | 5.15 |
| Straits Times | 2697.03 | 122.82 | 4.77 |
| Hang Seng | 20794.27 | 860.99 | 4.32 |
| Nikkei 225 | 12624.46 | 412.23 | 3.38 |
| Shanghai Composite | 2143.42 | -59.03 | -2.68 |
| European Indices # | Sept 8,2008 | Change* | % change* |
| CAC 40 | 4390.78 | 194.12 | 4.63 |
| IBEX 35 | 11619.80 | 480.10 | 4.31 |
| S&P/MIB | 28647.00 | 1080.00 | 3.92 |
| FTSE 100 | 5440.20 | 199.50 | 3.81 |
| DAX | 6326.73 | 199.29 | 3.25 |
| # as on 1900 hrs (IST) * over previous close | |||
The MSCI World added 1.7 per cent to 1,290.25 at 11:40 am in London as all 10 industry groups except for health-care companies rose. Europe’s Dow Jones Stoxx 600 Index and the MSCI Asia Pacific Index each climbed the most since January, advancing by 3.9 per cent and 4.5 per cent, respectively.
Japan’s Nikkei 225 Stock Average rose 3.4 per cent to 12,624.46, led by Toyota and robotmaker Fanuc.
Taiwan’s Taiex Index jumped 5.6 per cent, the biggest gain in Asia and the gauge’s steepest rally since October 2002, after the government said it may take action to boost stock prices and spending.
The benchmark Shanghai Composite Index, however, closed down 2.7 per cent at 2,143.42, the weakest close in 20 months, with property stocks under heavy pressure after news that China Vanke has cut prices in Shanghai and Hangzhou.