A man walks past an electronic screen showing the Hang Seng Index at a bank in Hong Kong Wednesday, Jan. 16, 2008. Hong Kong shares dropped sharply Wednesday in morning trading, tracking weakness on Wall Street after losses posted overnight by Citigroup Inc. and fears the U.S. is slipping into recession. (AP Photo/Kin Cheung)
HONG KONG – Asian markets rose modestly Wednesday, as exporters like Sony Corp. recovered from the previous day's sell-off after Federal Reserve Chairman Ben Bernanke said a big stimulus package could help revive the U.S. economy. European markets were lower in early trade.
Trading across the region was still cautious, with volumes relatively low and the markets paring their early gains on anxiety about company earnings. Crude oil prices climbed to near $39 a barrel after steep declines in recent days, and the dollar edged higher against the yen.
Bernanke said Tuesday the roughly $800 billion recovery package planned by the incoming Obama administration "could provide a significant boost to economic activity" as the U.S. struggles against a sharp slowdown in consumer spending and industrial production.
The Fed chairman also suggested banks and other companies may need more capital injections to stabilize the battered financial system.
"The comments from Bernanke ... are overall favorable for the financial system in the U.S.," said Dariusz Kowalczyk, chief investment strategist for SJS Markets in Hong Kong. "This is modestly positive, and given that the market was oversold, even small favorable news can trigger at least a temporary rebound."
Tokyo's Nikkei 225 stock average, which fell nearly 5 percent on Tuesday, gained 24.54 points, or 0.3 percent, to 8,438.45, and Hong Kong's Hang Seng Index added 36.56 points, or 0.3 percent, to 13,704.61 after a six-day losing streak, but finished well of its highs.
Overnight in the U.S., Wall Street finished largely mixed amid growing angst about corporate profits. The Dow closed down 25.41, or 0.3 percent, at 8,448.56, while the Standard & Poor's 500 index rose 1.53, or 0.2 percent, to 871.79.
U.S. futures were lower pointing to a weaker open on Wall Street Wednesday. Dow futures fell 19 points, or 0.2 percent, to 8,389 while S&P500 futures fell 4.6 points, or 0.5 percent, to 864.
In Hong Kong trade, Bank of China added 2.7 percent after Royal Bank of Scotland sold its entire stake in the mainland's No. 3 lender for nearly $2.37 billion, removing some uncertainty about investments in the Chinese company.
In the oil market, light, sweet crude for February delivery added $1.56 to $39.34 a barrel by midafternoon in Singapore in electronic trading on the New York Mercantile Exchange. The contract rose overnight 19 cents to settle at $37.78.
The dollar strengthened to 89.47 yen, up from 89.48 yen, and the euro advanced to $1.3240 compared to $1.3103.