AFP/Tokyo
Asian markets surged for a fourth straight day yesterday as dealers followed a rally on Wall Street sparked by a French and German promise to back up beleaguered eurozone banks. Adding to the sense of optimism was a decision by France, Belgium and Luxembourg to bail out Dexia bank, the first lender to be dragged under by the European debt crisis. Tokyo closed 1.95% higher, or 168.06 points, at 8,773.68, South Korea’s Kospi ended 1.62% higher, or 28.58 points, at 1,795.02, and Sydney’s S&P/ASX 200 gained 0.63%, or 26.6 points, to 4,227.6. Hong Kong’s benchmark Hang Seng index rose 2.4% higher, while Shanghai was up 0.2% higher after one of the nation’s sovereign wealth fund’s bought stakes in some of China’s biggest lenders. Regional traders have been in a buying mood for several sessions as fears that a likely Greek default would be contagious eased slightly, thanks to top European figures saying everything possible would be done to protect other economies. That culminated on Sunday with German Chancellor Angela Merkel joining French President Nicolas Sarkozy in saying they would help recapitalise the region’s banks. The pair vowed to detail a plan for the banks within two weeks. Despite the lack of any details on what they would do, the announcement gave investors some confidence that leaders were coming together to overcome a crisis many fear could spark another global financial downturn. Asian markets soared on the news on Monday as regional investors watched Wall Street and Europe also post healthy gains. On Wall Street, the Dow climbed 2.97%, the S&P 500 jumped 3.41% and the Nasdaq surged 3.50%. And in Europe London’s FTSE 100 added 1.80%, the Frankfurt DAX rallied 3.02% and in Paris the CAC-40 climbed 2.13%. Also bolstering confidence was France, Belgium and Luxembourg’s decision to help Dexia, the second time in three years that the lender has needed a rescue. The move suggests that European governments are willing to prevent the region’s banks from being swamped. The Shanghai market was boosted by China’s big four banks after sovereign wealth fund Central Huijin Investment bought stakes in each of them in a government move to shore up financial markets and boost confidence in the lenders. Industrial and Commercial Bank of China surged 7%, Bank of China rose 8.8%, China Construction Bank was 6.4% higher and Agricultural Bank of China climbed 14.7%. In other markets, Taipei added 2.59%, or 186.75 points, to 7,398.71; Manila closed 1.70%, or 68.69 points, higher at 4,109.27 and Wellington rose 0.69%, or 23.30 points, to 3,396.15.