Business » Markets

Updated: May 11, 2010 12:31 IST

Asian stocks extend rally on EU bailout

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” Asian stocks mostly rose for a second day on Tuesday as investors added to a global buying blitz after a nearly $1 trillion plan to contain Europe’s debt crisis.

Japan’s Nikkei 225 stock average gained just 0.1 percent to 10,539.01 after jumping 1.6 percent on Monday. South Korea’s Kospi climbed 0.6 percent to 1,688.4 and Australia’s S&P/ASX 200 was up 0.4 percent at 4,618.2.

Benchmarks in mainland China, Taiwan and Singapore also advanced, while Hong Kong’s Hang Seng index retreated 0.5 percent to 20,341.28.

Overnight on Wall Street, stocks rocketed to their biggest gain in a year. The Dow Jones industrials surged 3.9 percent to 10,785.14.

Investors were reassured after the European Union and the International Monetary Fund agreed to create a nearly $1 trillion rescue fund to support European nations burdened by heavy debt. The size of Europe’s response was greater than most analysts had expected, and it signalled that policymakers are ready to take major measures to protect the euro and keep Europe’s problems from spreading.

Markets were also relieved that the Federal Reserve and other central banks stepped up with financial support to corral what analysts warned was a growing financial crisis.

Financial issues in Sydney gained with National Australia Bank Ltd. up 0.7 percent.

Banks didn’t fare as well in Tokyo. Losses for the sector were led by Mizuho Financial Group Inc., which shed 2.9 percent on reports that Japan’s No. 2 bank would raise 1 trillion yen ($11 billion) by issuing new shares.

The Standard & Poor’s 500 index shot up 4.4 percent to 1,159.73. Like the Dow, it was the best day for the S&P 500 index since March 23, 2009. The Nasdaq composite index rose 109.03, or 4.8 percent, to 2,374.67.

Benchmark crude for June delivery was up 18 cents to $76.98 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.69 to $76.80 per barrel on Monday.

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