Asian share markets were gaining in Monday trading, with some comfort from signs world leaders are acting in a more aggressive and coordinated fashion to shore up financial markets and the banking sector.
Australia's S&P/ASX 200 was 5.7% higher after falling nearly 16% last week, with financial sector stocks boosted by a government guarantee of banking deposits. New Zealand's NZX-50 reversed an early 1% fall to be up 1.7% later in the day.
Korea's Kospi Composite had added 4.1% with the stock exchange briefly halting Kospi and Kosdaq program trading. Taiwan shares were down in light trading.
In TOKYO, that market will get a break on Monday after a rocky Friday. Unlike in the U.S., where the stock market is open despite it being Columbus Day, the stock market is closed in Japan on Monday, for Health and Sports Day there.
The Nikkei Stock Average on Friday suffered its largest one-day decline since October 1987, downl 9.6% to close at 8276.43, now 24% below where it was at the beginning of the week. At one point Friday, the Nikkei was down 11%.
"We've come from the depths of despair to something which will look a lot better, and that will see some reversals off what we saw last week," said ABN Amro currency strategist Greg Gibbs .
Still, concerns remained, analysts said, with banks still reluctant to lend to each other and funds hard to come by for many companies; worries persisted as well about the health of financial institutions in various parts of the world.
"Even though [leaders around the globe have] taken steps to avert a disaster, there's still a very sharp contraction of global growth," said ANZ currency strategist Tony Morriss . "I don't think you can say we're out of the woods."
Leaders from the 15 euro-zone countries agreed to a broad set of proposals to shore up the financial system, with the plan now going to the 27 European Union states at a summit in Brussels this week; the plan would allow member states to buy stakes in ailing banks and guarantee interbank lending, among other things.
In the U.K., some of the biggest banks were expected to detail Monday their participation in a bailout plan.
Asian shares were higher despite another fall in the Dow Jones Industrial Average on Friday; the DJIA ended down 1.5% for a 18% decline over the week.
In SYDNEY, the S&P/ASX 200 was aided by the government's move to guarantee bank deposits with National Australia Bank /zigman2/quotes/208329321/composite NABZY -1.43% shares up 10%; property trusts were gaining with Westfield Group higher by 13%, while miner BHP Billiton /zigman2/quotes/208108397/composite BHP -0.66% added 6.7% despite a further fall in LME copper prices.
Goldman Sachs JBWere analysts said the index may have seen "final capitulation" selling on Friday.
In WELLINGTON, New Zealand shares were helped by the positive lead from Australia; among active stocks, Fletcher Building /zigman2/quotes/200215142/delayed NZ:FBU +0.28% had added 4.4%.
In SEOUL, South Korean financial stocks were on the rise with Shinhan Financial /zigman2/quotes/208869909/composite SHG -1.69% up 6.1% and KB Financial adding 3.3%; steelmakers and shipbuilders also rose after recent sharp falls, with Posco /zigman2/quotes/209201002/composite PKX -1.35% higher by 3.8%.
It remains to be seen how Tokyo stocks will perform on Tuesday; much depends, of course, on how U.S. shares perform Monday. "Japan's financial markets are in total disarray," said John Richards , head of Asia research at the Royal Bank of Scotland in Tokyo. "There is a flight to cash and out of all risk assets, even bonds."
Citing sharp declines in the value of shares held for investment purposes, Yamato Life Insurance, a 97-year-old midsize insurer, made a bankruptcy filing Friday, becoming the first well-known Japanese financial institution to fall victim to the global credit crisis. That followed the collapse on Thursday of New City Investment Corp., Japan's first real-estate investment trust or REIT, to make a bankruptcy filing.
Japan's economy minister, Kaoru Yosano, stressed that Yamato's failure was an exceptional case brought on by its own financial weakness and that Japan's financial system is stable.
Still, the sharp decline in Japanese shares is a blow for Japanese banks, which have so far largely avoided critical injuries from the credit crisis.
Awash with deposits but unable to find enough corporate borrowers, many Japanese banks have invested heavily in stocks. Analysts say some banks begin to see a dent in their earnings from depreciation in these holdings when the Nikkei dips below the 10000 mark.
Among Japan's top banks, Mizuho Financial Group /zigman2/quotes/204507985/delayed JP:8411 -1.05% saw its shares fall 12% Friday, while Mitsubishi UFJ Financial Group was down 8.5%.
"Any way you look at it, stocks have fallen to deeply discounted levels," said Yoshinori Nagano , senior strategist at Daiwa Asset Management. "Now everything depends on whether the authorities can take steps to stop the fear from spreading."
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