3 Dec 2008

Stocks in Asia-Pacific gain

8:47 pm on 3 December 2008

Stocks in Asia and the Pacific rebounded on Wednesday, but low-risk assets such as US Treasuries also retained their lustre despite offering the lowest yields in decades amid worries about the ailing global economy.

Policymakers worldwide are cutting rates to fight a global recession and pondering further measures to stabilise financial markets.

Australia began the latest round on Tuesday, cutting its Official Cash Rate by 100 basis points to 4.25%.

New Zealand's Reserve Bank is expected to announce a further cut to its benchmark interest rate on Thursday.

The European Central Bank and the Bank of England are also expected to cut interest rates after meetings on Thursday.

But the outlook for the global economy continues to weaken, with Australia saying on Wednesday that growth in the last quarter was at its slowest pace in eight years as consumers and businesses reduce spending.

The Australian stock market closed marginally higher. At the 1615 AEDT close, the benchmark S&P/ASX200 index had risen 5.6 points, or 0.16%, to 3,533.8, while the broader All Ordinaries added 3.1 points, or 0.09%, to 3,476.5.

The New Zealand market was more buoyant, up 55 points, or 2.1%, to close at 2707 on turnover of $83 million. Top stocks Telecom rose 6 cents to $2.40, Contact Energy was up 5c to $6.55, while Fletcher Building gained 12c to $5.50.

In Japan, the Nikkei average advanced 1.8%, regaining some ground after a drop of more than 6% on Tuesday. Shares in Hong Kong and Shanghai gained 2 to 3%, while Singapore rose 1.4%.