By V. Phani Kumar
Asian banking and financial shares were mostly higher Monday as
investors awaited the release of a U.S. plan to stabilize the
financial system, although hopes were laced with concerns that
market intervention by Washington could spark inflation.
The advance extended the market's strong performance last week,
and as investors await U.S. Treasury Secretary Timothy Geithner's
briefing to unveil details of the new plan, scheduled for 8:45 a.m.
Eastern time.
A Wall Street Journal report late Sunday cited U.S. Treasury
Secretary Timothy Geithner as saying that the only way to resolve
the financial crisis was to work with the private sector to remove
troubled assets clogging banks' balance sheets.
Francis Lun, a general manager at Fulbright Securities in Hong
Kong, said that while Geithner's plan might influence Wall Street
in a big way, Asian markets were still worried about the impact of
the Federal Reserve's separate plan to buy longer-dated U.S.
Treasurys.
"Markets will be more concerned that [Fed Chairman Ben] Bernanke
is introducing another $300 billion to buy longer-term debt,
thereby increasing money supply and increasing the risk of
inflation," Lun said.
Most Asian currencies rebounded strongly against the U.S. dollar
last week after Bernanke detailed plans to buy the longer-dated
U.S. debt, with the greenback's weakness also spurring sharp gains
in crude-oil and gold prices.
But hopeful anticipation of the new Geithner plan overcame those
concerns about possible inflation from the Fed action. Shares of
Sumitomo Mitsui Financial Group (SMFJY) jumped 4% in Tokyo morning
trading Monday, while Mitsubishi UFJ Financial Group (MTU) shares
gained 2.7%.
The gains in Japanese shares came despite a downbeat business
sentiment survey released by the Japanese government Monday, which
posted a headline result of negative 51.3 in the first quarter of
this year, well below the negative 35.7 seen in the previous
quarter.
In the broader markets, the Nikkei 225 Average was up 2% at
8,104.48 in late morning trade, while Australia's S&P/ASX 200
gained 1.4%. Hong Kong's Hang Seng Index added 2% in the early
action, China's Shanghai Composite slipped 0.1% and Singapore's
Straits Times Index gained 1.1%.
May crude-oil futures were at $52.49 a barrel in electronic
trading, up 42 cents from their finish on the New York Mercantile
Exchange. April gold futures, meanwhile, slipped $4.60 to $951.60.
The contract dropped $2.60 on the Nymex Friday, after rising nearly
8% in the previous session.