Asian trade: Asian markets rose tonight for a second consecutive day, sharing the same strong momentum from the European and the U.S. equity markets. The financials led the gains, as some say the banking industry is on its way to recovery.
A large number of stocks grew more than 4% in the Nikkei tonight, helped by the positive momentum seen from the U.S. equity markets, which close 6% higher. The buying frenzy started after Citigroup announced the bank was profitable in the first two months of 2009, after 5 quarters of consecutive declines. Citigroup closed the day gaining 38%, while the XLF index rose almost 15%. The rally helped the U.S. major indexes rise from a 12-year low, while in the same time it pulled the financials from a 17-year low.
Meantime, in the real world, regulators are again searching for ways to stimulate the economy. A local Japanese newspaper reported that the government might propose new stimulus measures this month. The Japanese economy is projected to contract around 3% this year, erasing every gain seen in the last year. As such, Japan’s Lost Decade might become rather soon Japan’s Lost Decades.
Additionally, the “good” news this time is that the Japanese economy will probably be joined by a couple of others. Also today, the head of the Bundesbank, Mr. Weber, said that he does not see the need for interest rates to fall under 1%, and that he does not exclude that the economy might contract in the first part of 2010. This is a huge change from a couple of months back, when global growth was expected to pick up as soon as 2009.
Tonight, the Nikkei gained 262.76 points (3.72%) to 7,317.74. The Australian S&P rose 59.80 points (1.88%) to 3,244.30.
Crude oil advanced for a third time during the Asian session. Crude oil for April delivery added $0.20 to $45.90.
Gold was sold on positive equity markets. Bullion for immediate delivery fell $1.60 to $894.30.