|
Markets cheer Chinese economic stimulus plan
2008-11-10
TOKYO (AFP) - Stock markets surged Monday after China unveiled a huge economic stimulus plan, as incoming US president Barack Obama prepared to discuss the global financial crisis with the outgoing George W. Bush. Markets in Asia and Europe all enjoyed a buoyant start to the trading week after China and Australia became the latest economic powers to unveil measures aimed at cushioning the impact of the worldwide turmoil. But evidence of the downturn also abounded with figures showing industrial production in France falling by 0.5 percent in a month and Japan's core machinery orders plunging at the fastest pace in a decade. Chinese share prices soared 7.27 percent by the close while Tokyo ended 5.8 percent higher and Hong Kong share prices closed 3.5 percent higher. In early European trade, London rallied 2.77 percent, Paris jumped 3.10 percent and Frankfurt climbed 2.83 percent. "A solid finish on Wall Street last week and the announcement of a stimulus package to sustain the Chinese economy have both combined to shore up stock markets," said CMC Markets dealer Matt Buckland. Analysts said that investors had taken heart from a Chinese fiscal stimulus package totalling four trillion yuan (586 billion dollars) aimed at ensuring continued brisk economic growth in the face of flagging exports. Australian Prime Minister Kevin Rudd described it as "an extraordinary fiscal stimulus package" that would boost the world economy. Rudd himself announced 3.2 billion dollars (2.2 billion US) of financial assistance for the ailing Australian automotive industry. The Group of 20 major wealthy and emerging nations meanwhile pledged Sunday to take "all necessary steps" to boost sagging market confidence and give a bigger voice to developing countries in global economic affairs. The finance ministers and central bank governors of the G20 nations meeting in Sao Paulo said there was consensus for major reforms of a global international financial system ravaged by a credit crisis. The meeting aimed to lay the groundwork for a November 15 summit, hosted by Bush, on the financial turmoil. The US president was to meet with Obama at the White House on Monday, with the global economic crisis and Iraq topping the agenda of their first face-to-face meeting since Tuesday's elections. Obama succeeds Bush on January 20. British Prime Minister Gordon Brown was meanwhile to say Monday that the credit crisis has created a "moment of change" enabling world powers to rebuild the financial system. "If we learn from our experience of turning unity of purpose into unity of action, we can together seize this moment of change in our world to create a truly global society," said Brown, according to an advance text of his remarks. The upbeat start to the trading week came despite fresh reminders of the worsening health of the global economy. Japan's core machinery orders plunged at the fastest pace in a decade in the three months to September as the economy teetered on the verge of recession, official data showed. The orders, a leading indicator of corporate capital spending, tumbled 10.4 percent from the previous quarter as companies cut back on investment in new plants and equipment in response to the economic slump. Industrial production in France was also shown to have fallen by 0.5 percent in September from the figure for August which had shown a monthly contraction of 0.4 percent. Output by the auto industry, a motor of economic activity in France was particularly hard hit, plunging 3.1 percent, the national statistics office said.
| 
