Asian stocks mixed after US bailout agreement

The Jakarta Post , Jakarta | Mon, 09/29/2008 10:53 AM | Business

Asian stocks were mixed Monday after a US$700 billion rescue plan of the financial industry - the biggest U.S. government bailout in history - appeared to get the go-ahead from Congressional leaders in Washington.

The U.S. plan, which still approval in both houses of Congress, would give the administration broad power to use taxpayers' money to purchase billions of home mortgage-related assets held by cash-starved financial firms. But it includes stronger spending controls at the insistence of lawmakers.

Tokyo's benchmark Nikkei 225 index was up 0.46 percent at 11,947.65, but gains were limited by doubts over the effectiveness of the plan and lingering concerns about a global economic slowdown.

Hong Kong's Hang Seng index fell 2 percent while South Korea's Kospi lost 0.8 percent. Benchmarks in Australia and Singapore were also down, while indices in the Philippines and New Zealand were up.

Exchanges in mainland China were closed for a national holiday, and Taiwan markets were shut down due to a typhoon.

The package, held up for days by election-year politics, goes a House of Representatives vote later Monday.

Banks in Tokyo gained on hopes the plan would pass soon and bring stability to the global financial system, with Mitsubishi UFJ Financial Group Inc. gaining 2.5 percent and Mizuho Financial Group Inc. up 0.9 percent.

Japan automakers Toyota Motor Corp. and Mazda Mazda Motor Corp. fell after the Nikkei financial daily reported that the two companies were cutting production in China due to weaker demand.

In currencies, the dollar strengthened to 106.45 yen. The greenback also gained against the euro, which was trading at US$1.4499.