Easing credit markets bouy Asia

Hong Kong - Asian stock markets rose again on Tuesday, buoyed by further signs of easing in credit markets and support by the chairperson of the US central bank for more measures to aid the country's troubled economy.

Japan's Nikkei 225 index climbed 2.46% to 9 226.70, and Hong Kong's Hang Seng Index ticked up about 0.1% to 15 331.34.

Stock markets in Singapore, Australia, mainland China and Thailand also gained.

Market sentiment was helped by an overnight surge on Wall Street, where the Dow Jones industrial average rose 413.21, or 4.67%, to 9 265.43.

Investors were relieved by a further slackening in bank-to-bank lending rates in light of moves by governments around the world to increase liquidity and get money flowing again among companies.

Adding to the sense of optimism were fresh measures to boost Asian economies on Monday: India's central bank unexpectedly cut the nation's key lending rate by one percentage point and China signaled more government intervention to spur lending and stabilise the country's volatile financial markets.

Momentum was also building in the US for more economic aid after Federal Reserve Chairperson Ben Bernanke said on Monday that further steps might help ease the country's economic weakness. He also warned there was "some risk of a protracted slowdown."

"In all we're in a better place and conditions are better than two weeks ago," said Khiem Do, a Hong Kong-based fund manager who helps oversee about $8bn of Asian equities at Baring Asset Management.

"The measures have pacified investor panic as far as the banking system is concerned. You have monetary easing in a number of countries. And you have a market that was oversold and started to offer very attractive valuations."

South Korea's market was left out of the regional advance. The Kospi traded down about 1% amid lingering concerns about the economy despite government measures to commit $130bn to bail out the country's financial system.

In oil, crude prices climbed 90c to $75.15 a barrel on Tuesday in Asia as investors expected Opec to try to halt a three-month slide in prices by cutting production quotas at least 1 million barrels a day. The contract gained overnight $2.40 to settle at $74.25.

The dollar fell against the yen to ¥101.62 and was little changed against the euro.

In Hong Kong, the interbank offered rate for three-month loans continued to slide, falling from 3.66% to 3.35% as credit markets loosened up around the world.

Overnight in London, the interbank lending rate for three-month dollar loans fell for the sixth day running on Monday and by its biggest daily amount since January.

- AP