Asian Stocks Move Higher Amid War Talk
HONG KONG (AP) _ Shares in Asia’s biggest stock markets rose more than 2 percent Tuesday morning, as many traders bet a war in Iraq will be short and decisive after U.S. President George W. Bush’s ultimatum to President Saddam Hussein.
Still, some traders remained cautious and some shares failed to hold on to all early gains after Bush delivered a live television address that gave Saddam and his sons 48 hours to quit Iraq or face war.
``Most people think that the war is only going to be a very short war and therefore markets are building in the rally that would come if it is a short war,″ said Ric Klusman, who advises clients at Terrain Securities in Australia.
At the Australian Stock Exchange in Sydney, people watched Bush on a giant screen, with a murmur rising up as he delivered the war warning.
Klusman warned that if a war takes longer than expected, ``this market could see a bit of a risk again.″ War fears have helped put a damper on stock prices for months in many markets.
Prices rose sharply as the first few markets opened during the Asian trading day, right before Bush spoke, with prices apparently following Wall Street’s strong advance Monday on speculation that any war would be quick.
On Monday, the Dow Jones industrial average gained 3.59 percent and the Nasdaq composite index added 3.88 percent.
Although several markets had slipped from their morning peaks by the time Bush was finished, prices stayed mostly firm and the larger markets across the Asia-Pacific region were all more than 2 percent higher. Some smaller markets showed smaller advances.
The Bush speech ``brought on a bit more momentum,″ said Rex Lin, vice president of equities at ING Financial Markets in Taipei, where the market was up by 4.43 percent after Bush spoke. ``A lot of players right now are sensing a quick resolution to the Iraq situation.″
But Lin, like other analysts, warned that investors remained jittery.
``The situation is still very volatile,″ he said.
Tokyo’s 225-issue Nikkei Stock Average was up by 2.12 percent at 8,038.87 points after the Bush ultimatum, after rising by as much as 2.57 percent earlier.
In Seoul, the Korea Composite Stock Price Index was up by 2.44 percent at 527.81 points, after showing early gains of more than 4 percent.
Benchmark indexes were up by 2.35 percent in Sydney, 2.12 percent in Singapore and 1.11 percent in Wellington.