May 20 – Stocks across Asia rose yesterday on the back of U.S. banks repaying bailout debt sooner than expected and buoyed by the positive electoral outcome of the Indian elections.
The region’s benchmark indexes rose to a seven month high. Indications from the United States and Europe that the banking system was showing signs of improvement gave impetus to Japans MSCI Asia Pacific Index, with financial companies accounting for 35 percent of its rise. The index has climbed more than 41 percent since a five year low in March.
In India, the Bombay Stock Exchange Sensitive Index, or Sensex, rose to 14,302 on sentiment that the new Congress Party will speed up economic reforms, and appears to be a target for overseas funds. Hong Kong’s Hang Seng Index rose 521 points, while the mainland’s benchmark Shanghai Composite index rose by less than 1 percent as economic concerns over the manufacturing sector damped down generally positive feelings elsewhere.
In the United States, Goldman Sachs, JPMorgan Chase and Morgan Stanley look set to repay the money borrowed from the U.S. government and have applied to do so, in signs they are becoming more confident as the economic crisis seems to be winding down. An ability to extend credit again to U.S. manufacturers, importers, exporters and borrowers needs to be sustainable before the crisis can be declared over, however, in Asia at least, some optimism appears to have returned.
