Asian Stocks Down Amid Pessimism Over US Plans

By: AP
By: AP

HONG KONG – Most Asian stock markets fell Thursday, with Japan's benchmark losing over 3 percent, amid doubts that U.S. plans costing trillions of dollars will soon restore the health of the world's largest economy.

Investors seemed more wary than relieved after U.S. lawmakers finally agreed overnight to a $790 billion stimulus bill designed to pull the economy out of recession by creating jobs through spending and tax cuts. President Barack Obama could sign the measure within days.

The news came a day after the Obama administration's newly revised program to rescue the financial sector with some $2 trillion in funding met with widespread skepticism. Investors criticized the plan for what they said was a lack of specifics.

With economies in the U.S. and elsewhere still showing signs of stress, investors are increasingly pessimistic about the ability of governments to turn around the global economy anytime soon.

"The problem is the U.S. such a big hole. People are afraid that even more trillions of dollars will not help much," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "What they've done doesn't seem to have worked so far. We are facing another crisis, the banks are still insolvent and the economy isn't getting better."

Tokyo's Nikkei stock average lost 259.59 points, or 3.3 percent, to 7,686.35 as Japan's market caught up with region-wide losses on Wednesday after being closed for a national holiday. Hong Kong's Hang Seng lost 359.32 points, or 2.7 percent, to 13,175.65.

South Korea's Kospi lost 2.3 percent, Shanghai's main index was off 2 percent and Taiwan's benchmark retreated 2.1 percent. However, Australia's key stock measure gained 0.8 percent.

Overnight in New York, the Dow Jones industrial average rose 50.65, or 0.6 percent, to 7,939.53 in a choppy a session as investors digested the flood of news coming from Washington.

Broader stock indicators also rose. The Standard & Poor's 500 index rose 6.58, or 0.80 percent, to 833.74, and the Nasdaq composite index rose 5.77, or 0.4 percent, to 1,530.50.

U.S. futures were mixed, suggesting investors were still wavering ahead of Wall Street's open.

Oil prices rebounded slightly after a steep fall overnight, with light, sweet crude for March delivery up 25 cents at $36.19 a barrel in Asian trade. The contract shed $1.99 to settle at $35.94 a barrel on the New York Mercantile Exchange on Wednesday.

In currencies, the dollar weakened to 90 yen, down from 90.30 yen, and the euro traded higher at $1.2898 compared to $1.2881.


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