(1888PressRelease)
May 08, 2009 - Asian stock markets climbed Thursday, following Wall Street higher as early reports about the U.S. government's tests of banking health helped allay investor concerns about the financial sector.
Japanese shares led the way, with the Nikkei benchmark jumping 4 percent, as investors returning from a three-day holiday played catch up with gains on other regional markets this week. Oil prices, which hit a new high for 2009 overnight, continued to gain ground.
Investors seemed comforted after media reports indicated the balance sheets of Bank of America and other top U.S. banks aren't as bad as feared, though many would still face huge capital shortfalls should the economy worsen.
The news, a day ahead of an official announcement Thursday, helped dispel the uncertainty about the government's "stress tests" and about just how many more billions of dollars U.S. lenders will need to cover their losses.
It was the latest confidence booster for investors who've pushed up major benchmarks, from the U.S. to Asia, by 30 percent since March amid signs that the worst of the global recession has passed. Better-than-expected news about employment in the U.S. and Australia only added to the optimism.
That belief is likely to harden in Asia, some analysts say, as economic activity picks up and leads more and more big institutional investors to buy, driving the market still higher.
"One can view the stress tests as a success because they apparently increase confidence in the financial sector," said Stephen Yang an analyst with Seedorf Luxman & Partners in Singapore.
"In Asia, we've moved on," the Seedorf Luxman & Partners analyst said. "We've clearly decoupled from the developed markets and as people are waking up to that they're realizing they need to own riskier assets and need to buy these markets."
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