Asian Markets rise despite bad economic news (MarketWatch) (10-12-2008)

HONG KONG (MarketWatch) -- Asian markets rose on Wednesday, despite bad economic news, as investors were optimistic on expectations that economic stimulus measures by governments around the world could support weakening demand; as a result financial and resource stocks advanced.

Japanese shares jumped after a shaky start, with the Nikkei 225 Average rising 3% to 8,643.27 in afternoon trading, while the broader Topix index advanced 1.9% to 833.74.

Hong Kong's Hang Seng Index rose 2.8% to 15,172.78, after dropping 1.9% in the previous session, Australia's S&P/ASX 200 climbed 1.1% to 3,643.10, reversing early declines, and South Korea's Kospi added 2.6% to 1,134.42.

China's Shanghai Composite dropped 1.2% after official data showed the country's producer price inflation climbed at a lower-than-expected 2% in November from the year-ago month, after rising as much as 6.6% in October.

Singapore's Straits Times Index gained 0.3% to 1,759.55 and Taiwan's Taiex rose 2.8% to 4,597.63, while New Zealand's NZX 50 index slipped 0.1% to 2,722.77.

Shares of Air China soared 18.8% in Hong Kong and rose 1.5% in a downbeat Shanghai market a day after the Chinese civil aviation regulator said it was encouraging airlines to cancel or postpone plane deliveries due in 2009 because of falling demand for air travel.

In Tokyo, Elpida Memory jumped 6.6%, on top of Tuesday's 17.6% surge. Reuters reported the chipmaker could be forced to redeem a recently-issued $540 million convertible bond, which may trigger a brief rebound in the shares after they suffered deep losses on concerns about equity dilution.

Shares of Sony Corp. gained 0.8% in line with the broad market, reversing early declines. The stock dropped earlier in the session after the company Tuesday announced a restructuring, which includes slashing 8,000 full-time jobs worldwide, reducing investments in the electronics business by 30%, closing 10% of its 57 manufacturing sites and withdrawing from unprofitable businesses because of a global economic downturn.

Source: MarketWatch