After a painful downturn last week, most stock indexes in Asia and the Pacific region began this week with significant increases. Optimism prevailed among investors after the United Arab Emirates (UAE) said they would support their banks, which fell into difficulty because of the insolvency of the investment fund Dubai World. Most local currencies rose, and risk premiums on corporate bonds fell. The regional index MSCI Asia Pacific, which monitors the securities markets in ten Asian countries plus Australia and New Zealand, rose 3.5 percent to 117.85 points. This is the strongest measure of stock market growth since the beginning of April this year. Today, the UAE central bank said it stands behind the credit companies in the seven Arab Emirates, and the government of China confirmed that it will not hurry to withdraw its measures to support the economy. The financial companies in the composition of the MSCI Asia Pacific contributed most to the strong increase of the index today after last week suffered the most along the news about the financial problems of Dubai. The main stock index fell in Dubai with a record 7.2 percent last year, and the Abu Dhabi stock slid more than 8%. Today was the first business day of the exchanges in the UAE, which closed late last week because of holidays in the Arab world. The Japanese Nikkei 225 rose by 2.9 percent to 9345.6 points. Shares of exporting companies rose, although the rate of the yen against the dollar increased by 0.7 percent today. This increases the cost of Japanese goods companies abroad. In India, the BSE Sensex 30 rose 1.7 percent to 914.1 points to 16 after the country’s economy grew more than expected by 7.9 percent for the period July-September compared to last year.
The Indian rupee also become more expensive relative to the U.S. dollar. South Korean won rose by 1.1 percent to 1 162 won per dollar, which is the strongest currency growth for the last month. Finance Ministry of South Korea announced today that local banks have limited investment in the emirate of Dubai. After news of the main Kospi index in Seoul ended with an increase of 2% to 1 556 points. The Chinese Shanghai Composite Index rose further by 3.2% to 3 195.3 points, while Hong Kong’s Hang Seng added 3.3% to 21 821.5 points. In Australia, index of blue chip S & P / ASX 200 is increased by 2.8 percent to 4701.3 points, supported mainly by good performance of the banking sector. The four biggest financial companies in the country said today that they did not expect material losses from the eventual failure of the Dubai government investment holding company Dubai World, which has commitments for 59 billion dollars. On the New Zealand Stock Exchange main index NZX 50 Date added 1 percent to its value at 3125.5 points.