Asia Stocks Rise on Renewed US Auto Bailout Hopes

HONG KONG — Asian stock markets rebounded sharply Monday after the Bush administration revived hopes of a bailout for troubled U.S. automakers and China announced a multibillion dollar plan to spur consumer spending.

The region's advance was another sign world markets may be stabilizing, at least in the short term, from their dizzying declines over the last three months, analysts said.

Asia's upward swing followed Wall Street, where stocks rallied from an early sell-off Friday as the Treasury Department said it was ready to assist Detroit's Big Three automakers after a $14 billion rescue plan died in the Senate.

U.S. stocks looked poised to build on last week's gains as Wall Street futures rose moderately. Dow futures were up 49 points, or 0.6 percent, at 8,738 and S&P500 futures rose 5.4 points, or 0.6 percent, to 890.80.

As in the U.S., investors appeared unfazed by dismal economic data. Japanese shares led Monday's advance even as the country's central bank released figures showing confidence at major manufacturers marked its sharpest drop in 34 years.

"Investors think the automakers are going to be rescued after all," said Nicole Sze, Singapore-based investment analyst at Bank Julius Baer & Co., which manages about $300 billion in assets.

"It does seem the market is reacting to stimulus and bailout measures positively and choosing not to focus on data showing a slowdown in growth," she said.

Tokyo's Nikkei 225 index jumped 428.79 points, or nearly 5.2 percent, to 8,664.66 points, and Hong Kong's benchmark Hang Seng index added 452.46, or 3.1 percent, to 15,210.85 points. South Korea's Kospi rose 4.9 percent to 1,158.19.

Major stock measures in Taiwan, India, Australia and Singapore were higher by 2 percent or more.

In mainland China, Shanghai's key index rose 0.4 percent to 1,962.60 after Saturday's announcement from the central government to increase the amount of money circulating in the economy next year to boost consumer spending.

Among Monday's top gainers were car companies as investors bet the Bush administration would tap a $700 billion financial bailout fund to aid U.S. automakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.

In Japan, Toyota Motor Corp. surged 8.3 percent and Honda Motor Co. jumped 7.8 percent despite a strengthening yen, which erodes the earnings of Japan's exporters.

The dollar weakened to 90.81 yen from 91.15 late Friday, when it fell to 13-year low of 88.16 yen.

Oil rose 98 cents to $47.26 a barrel in Asian trade as investors anticipated OPEC will announce a large production cut at its meeting this week. The January contract fell $1.70 to settle at $46.28 overnight.

Copyright AP - Associated Press
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