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Asian shares gain on 2009 hopes

(Agencies)
Updated: 2009-01-02 16:44

South Korea said on Friday exports tumbled 17.4 percent in the year to December, while data showed a recession in Singapore deepened in the fourth quarter leading the government to cut its growth forecast for 2009.

A man holding a bull takes part in the opening ceremony of the stock exchange market for the new year at the Korea Exchange in Seoul January 2, 2009. Seoul shares gained on their first trading day of 2009 on Friday after a string of losses in the last week of December, with LG Display and shipbuilders boosting the index, but a weaker won sent banks lower. The Chinese letters on the back of the bull read, "Stock market! Be active!" [Agencies]

Still, financial markets showed signs that investors were willing to add more risk, as reflected by a fall in US Treasuries in Asia.

Benchmark 10-year notes fell 10/32 to yield 2.251 percent. That meant the yield rose 5 basis points from US trade on Wednesday, and 20 basis points over the past two trading days, recovering after touching five-decade lows last month.

Two-year notes were flat to yield 0.768 percent.

Considerable uncertainty remains in financial markets about how effective stimulus measures and low interest rates will be in stimulating global growth.

US President-elect Barack Obama, who takes office this month, has pledged to deliver a stimulus package that aims to generate 3 million new jobs. It may be worth $775 billion or more.

Euro Falls 

The euro fell on expectations that the euro-zone economy will suffer for longer because of the European Central Bank's reluctance to cut interest rates as aggressively as other central banks.

It slipped 0.8 percent from late US trade on Wednesday to $1.3855.  Against sterling, it dropped 1.3 percent to 94.525 pence.

The South Korean won meanwhile tumbled more than 5 percent to 1,330.9 per dollar after the country's weak trade numbers, while the Singapore dollar  fell as far as 1.4557 per US dollar, down almost 1.5 percent from Wednesday's close.

Concerns over global demand hit oil prices, which slumped $2.06 to $42.54, after crude on Wednesday surged $5.57 when a slowdown in US refinery activity had sparked fears of tightening fuel supply this winter.

Gold gave up some of its early gains on Friday, but analysts said the dollar's recent weakness and expectations of more grim US economic data could still ignite safe-haven buying.

Gold was last trading at $871.85 an ounce, down $8.3 from its notional New York close on Wednesday.

 

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