Asian, European markets rise on US housing data, better offer for Bear Stearns, Wall Street

The Associated Press ,  Bangkok   |  Tue, 03/25/2008 5:28 PM  |  Headlines

Asian and European markets surged Tuesday as investors returned from the Easter holiday in a mood to buy, encouraged by upbeat U.S. housing numbers and overnight gains
on Wall Street.

Investors also were heartened by news that JP Morgan Chase & Co. raised its offer for Bear Stearns fivefold to US$10 a share from US$2 a share. The new offer signals that investors' losses might not be as sizable as feared.

Markets in Hong Kong and Australia, both of which were closed since Thursday, jumped on easing concerns about the global credit crisis that has battered stocks since the start of the year.

"I think this is the beginning of a rally," said Francis Lun, a general manager at Fulbright Securities in Hong Kong. "We have gone down low enough and the market is ready for a rebound. Banks will lead the rally."

Hong Kong's benchmark Hang Seng index jumped 6.4 percent to 22,464.52, while Australia's S&P/ASX 200 index rose 3.7 percent to finish at 5,318.4.

Japan's Nikkei 225 index climbed 2.2 percent to 12,745.2 after closing flat Monday, and India's Sensex was up more than 6 percent n late afternoon trading.

In Europe, where major markets were closed since Thursday, stocks advanced strongly in early trading. In the U.K., the FTSE 100 rose .1 percent 5,664.7, while Germany's DAX gained 2.8  ercent. France's CAC 40 was up 3.1 percent.

Investors got an unexpected dose of positive news about the U.S. housing sector, which has been at the heart of the credit problems. The National Association of Realtors that Monday said sales of  existing homes rose 2.9 percent in February, the first gain since
July.

The Dow Jones industrial average rose 187.32, or 1.52 percent, to 12,548.64 on Monday, after rising more than 260 points on Thursday, the last day of trading before the Easter weekend.

In Tokyo, electronics and trading companies were buoyed by the recent recovery in the U.S. dollar, which was trading at 100.20 yen. Last week, it dropped below 96 yen for the first time since August 1995. Gainers in Tokyo included Canon Inc., which rose 3.9 percent,
and Itochu Corp., up 4.8 percent.

In Australia, banks led the market higher. National Australia Bank, the nation's largest lender, rose 5.1 percent, while Australia and New Zealand Banking Group added 5.9 percent.

Still, some analysts warned that the declines in regional markets may not be over.

"It's too early to conclude an end of the prevailing bear market," said Ernie Hon, a strategist at ICEA Securities in Hong Kong. (***)

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