Asian stock markets mostly higher on Citi report

By JEREMIAH MARQUEZ
AP Business Writer

(AP:HONG KONG) Asian stocks were mostly higher Monday, with Hong Kong and South Korea's benchmarks up more than 2 percent, amid reports the U.S. government might take a larger stake in troubled banking giant Citigroup to ease the financial crisis.

Worries that major Western banks, crippled by growing losses from bad assets, might have to be nationalized sent markets sharply lower last week.

But investors seemed relieved to have some clarity about the fate of Citigroup after the Wall Street Journal, citing people familiar with the situation, said late Sunday that Citigroup Inc. is negotiating with authorities to increase the U.S. government's stake in the teetering lender to as much as 40 percent.

Executives would prefer to keep the government's stake closer to 25 percent, according to the Journal, which reported Citigroup made the proposal to regulators.

So far, President Barack Obama's financial rescue plans have met a lukewarm reception. But analysts say such a move could help restore confidence by finally bring a measure of stability to the hard hit financial sector, further boosting the chances for an economic recovery.

"People are taking it as a positive sign," said Francis Lun, general manager of Fulbright Securities Ltd. "It shows the government will not allow a major bank to fail again. They've learned their lesson with Lehman Brothers that the ramifications are so great, sometimes no amount of money can rebuild confidence."

Hong Kong's Hang Seng rose 291.26, or 2.3 percent, to 12,990.43 and South Korea's Kospi was up 25.39, or 2.4 percent, at 1091.22.

In mainland China, the Shanghai benchmark added 0.4 percent. Markets in Taiwan and the Philippines also edged higher.

In Japan, the Nikkei 225 stock average lost 29.12 points, 0.4 percent, to 7,387.26 as the yen strengthened against the dollar, thought recouped some its losses. Australian shares also fell.

U.S. futures were higher on the Citigroup report, suggesting Wall Street would recover at the open. Dow futures rose 67 points, or 0.9 percent, to 7,419 and S&P500 futures were up 7.8 points, or 1 percent, at 777.30.

Last Friday, continuing financial and economic worries sent the Dow Industrials down 100.28 points, or 1.3 percent, to 7,365.67 On Thursday, the Dow broke through its Nov. 20 low of 7,552.29, and closed at its lowest level since Oct. 9, 2002.

The Standard & Poor's 500 index on Friday fell 8.89, or 1.14 percent, to 770.05.

Oil prices were steady in Asian trade, with light, sweet crude for April delivery up 35 cents at $40.38 barrel. The contract edged down 15 cents to settle at $40.03 Friday.

In currencies, the dollar fell to 92.85 yen from 93.32 yen, while the euro strengthened to $1.2913 from $1.2825.

One thought on “Asian stock markets mostly higher on Citi report

Comments are closed.