Asian stocks rallied the most in more than two weeks, led by carmakers and airlines, as oil’s biggest plunge in four years eased concern that rising energy costs and faster inflation will erode earnings.
The MSCI Asia Pacific Index gained 1.5 per cent to 123.48 as of 7:03 p.m. in Tokyo, rebounding from a four-week, 8.5 per cent retreat that sent the gauge to the lowest since July 24, 2006. The index advanced the most since August 6.
The regional measure has dropped 22 per cent this year as soaring inflation assailed global economies and the world’s largest financial companies posted writedowns and credit losses of more than $500 billion.
Japan’s Nikkei 225 Stock Average rose 1.7 per cent to 12,878.66. Hong Kong’s Hang Seng Index, which was closed on August 22 because of a typhoon, jumped 3.5 per cent, posting the region’s biggest gain. Indices also climbed in most markets open for trading. The Philippines is shut for a holiday on Monday.
US stocks advanced on August 22, lifting the Standard & Poor’s 500 Index by 1.1 per cent. Financial companies on the S&P 500 index rose the most in two weeks, led by a rally in Lehman.
Futures on the S&P 500 dropped 0.4 per cent. Crude oil for October delivery plunged 5.4 per cent to $114.59 a barrel, the biggest drop since December 27, 2004, after BP resumed flows through a Caspian pipeline. Futures were at $115.02 on Monday.
European stocks drop
European stocks fell as concern deepened that credit losses will spread and oil’s advance above $115 a barrel pushed retailers and consumer companies lower.
Europe’s Dow Jones Euro Stoxx 50 Index, the benchmark gauge for the nations sharing the euro, slipped 0.2 percent to 3,306.71 at 12:48 p.m. in London. The index is down 25 percent this year even after a 5.2 percent jump since mid-July, as credit losses at banks topped $500 billion, inflation accelerated and oil rose to a record.
The Danish Central Bank said yesterday it will buy Roskilde Bank A/S after no buyers were found for the regional operator, which last month became the first bank in the country to be bailed out for 15 years. US regulators closed Columbian Bank and Trust of Topeka, Kansas, the nation’s ninth bank to collapse this year, according to an August 22 statement.
National benchmark indices declined in nine of the 17 western European markets that were open. Trading will probably be slower than average on Monday with the UK market closed for a holiday. France’s CAC 40 fell 0.3 per cent, while Germany’s DAX was little changed.
