Stocks bounce back but stormy water lies ahead

Hong Kong: Bourses in Asia were the first to open after yesterday’s dramatic move by US financial authorities to create a government-sponsored vehicle to acquire the so-called “toxic assets” which lie at the root of recent global financial turmoil.

Asian stock markets set a trend that was to be reflected across the world as exchanges opened later in other time zones. Chinese stocks reversed this week’s downward spiral, surging 9.5% overall, with many of the country’s banking shares well up in double digits. Hong Kong shares soared by a similar figure whilst the Nikkei climbed 3.8%, Australian stocks rose 4.3% and South Korean stocks shot up by 4.6%. Financial shares were in heavy demand across the world, following their heavy beating in recent days. Despite widespread relief that the global run on shares had been brought to a halt, at least for the moment, macroeconomists are in little doubt that there will be some very stormy weeks ahead. For shipping too the outlook is more uncertain than at any time recently. As the credit squeeze has taken hold over the last 12 months, access to capital has become increasingly limited for shipyards and their owner customers. But the repercussions are likely to spread further.
Read More