29 Jan 2009

Asia-Pacific markets climb

9:10 pm on 29 January 2009

Markets in Asia and the Pacific climbed on Thursday as investors took heart from the US Congress making headway on a $US825 billion stimulus spending package and other efforts to stem the global financial crisis.

In New Zealand, the Reserve Bank cut the benchmark interest rate by 1.5 percentage points to 3.5% - the lowest it has ever been.

Reserve Bank Governor Alan Bollard said move was a response to the worsening global recession and warned that retail banks must help promote economic growth by passing the lower interest costs to customers.

All the major banks in New Zealand dropped fixed and floating home loan rates on Thursday.

The New Zealand sharemarket was up 22 points, or 0.81%, to 2770 on turnover of $85 million at the close of trade.

Top stocks were mixed. Telecom gained 6 cents to $2.66, while Fletcher Building was up 4c to $5.52. Contact Energy was down 5c to $6.73 and The Warehouse lost 12c to $3.60.

The NZX Group gained 62c, or more than 12%, to $5.45, after announcing it is in advanced negotiations to sell the TZ1 carbon trading business.

In Australia, bargain hunters nudged the share market into positive territory, supported by resource and oil stocks, following firmer commodity prices and a strong rally on Wall Street.

The benchmark S&P/ASX200 index was up 30.7 points, or 0.88%, at 3,526.2, while the broader All Ordinaries index had gained 26.2 points, or 0.76%, to 3,461.3.

Japanese share prices closed up 1.79% as investors hoped for a quicker US recovery after the House of Representatives approved the giant stimulus package.

The Tokyo Stock Exchange's benchmark Nikkei index rose 144.95 points to 8,251.24, extending gains for a third straight session.

The broader Topix index of all first-section shares gained 14.14 points or 1.76% to 818.47.

The MSCI index of Asia-Pacific stocks outside Japan rose 1.3%, pulling further away from a six-week low struck last week.

Activity was limited with some countries still on holiday for Lunar New Year. Financial markets in Hong Kong reopened after a three-day break, but markets in China and Taiwan remained closed.

Hong Kong's Hang Seng index jumped 5.4%, catching up with a broad rally in global stocks this week.