Asian stocks and US futures rose as US President-elect Barack Obama pledged the biggest public works programme in about 50 years and India cut interest rates.
Komatsu, the world’s No. 2 maker of construction machinery, rose 11 per cent after Obama planned the largest spending package since President Dwight D Eisenhower created the interstate highway system. India’s Housing Development Finance Corp. added 5.7 per cent on a $4 billion government stimulus plan. Hong Kong Exchanges & Clearing Ltd. surged 16 per cent after a government official said a plan that permits Chinese nationals to buy the city’s shares is still on track.
“Governments, not only the US, must spend to replace the growth that will be lost from weak consumer spending,” said Jonathan Ravelas, a strategist at Banco de Oro Unibank Inc. in Manila, which has over $6 billion in trust assets under management. “Investors have been waiting for this kind of stimulus to cushion the effects of a global slowdown.’’
The MSCI Asia Pacific Index gained 4.5 per cent to 83.07 in Tokyo, the most since October 30. About 13 stocks rose for each that fell. The gauge lost 3.8 per cent last week as commodity prices slumped amid signs the global recession is deepening. The index is valued at 12 times estimated profit, almost a third below its level at the start of 2008.
Japan’s Nikkei 225 Stock Average advanced 5.2 per cent to 8,329.05. China’s CSI 300 Index advanced 4.1 per cent, a sixth-straight gain and its longest winning streak this year, amid optimism an annual government economic conference that starts On Monday will spur measures to stimulate growth.
Hong Kong’s Hang Seng Index surged 8.7 per cent, while South Korea’s Kospi Index climbed 7.5 per cent. Australia’s S&P/ASX 200 Index jumped 4.1 per cent, led by Santos Ltd., the country’s third-biggest oil and gas producer, on takeover speculation. Most markets in the region advanced, with Singapore, Indonesia and Malaysia closed for public holidays.
Governments globally have introduced measures this year to buttress their economies from the worst financial crisis since the Great Depression. The MSCI World Index has lost 45 per cent in 2008, wiping out over $30 trillion in value as the US, Japan and Europe entered recession. The MSCI Asia Pacific Index slumped 47 per cent in that time.
Australia will start making one-time payments to families and pensioners as part of its $6.8 billion stimulus package from On Monday, ministers said. In Beijing, Chinese leaders may decide to cut personal income taxes at this week’s economic conference, Daiwa Institute of Research’s Kevin Lai said.
Futures on the Standard & Poor’s 500 Index climbed 2.6 per cent. The stock gauge rose 3.7 per cent on December 5 as insurer Hartford Financial Services Group Inc. increased its profit forecast and said it’s weathering the credit turmoil.
Komatsu, which counts the Americas as its biggest overseas market, jumped by its daily limit of 100 yen to 1,007, snapping a five-day, 21 per cent decline. Westfield Group, the shopping center owner that derived 39 per cent of its 2007 sales from the US, climbed 4 per cent to A$13.75.
Obama said on December 6 he will boost investment on roads, bridges and public buildings to create and preserve 2.5 million jobs.
