Asian stocks soared yesterday, with Tokyo posting a historic rise above 14 per cent, after investors welcomed concerted efforts by world leaders to put an end to the global financial meltdown. But economists and analysts said that it is still too early to bring out the champagne.
Markets were cheered as governments in the United States, Europe, Japan and Australia introduced aggressive, coordinated measures totalling more than US$1 trillion (S$1.46 trillion), boosting confidence that the worst credit crisis since the Great Depression could be easing.
Tokyo's Nikkei soared 1,171.14 points, or 14.15 per cent, to end at 9,447.57 - its largest percentage gain. Seoul rose more than 6 per cent; Taipei, 5.4 per cent; Hong Kong, 3.2 per cent, andSingapore, 2.5 per cent.
Market watchers, however, remained cautious. "It is too early to say that this is the beginning of the end of the crisis," said regional economist Simon Wong at Standard Chartered in Hong Kong, quoted by The New York Times.
"The crisis ultimately emanated from the problems in the US real-estate sector, and we have not seen that sector stabilising yet," he said. Analysts cautioned that once the immediate bailout relief subsides, the focus will return to the fundamental economic outlook, which has worsened, the International Herald Tribune (IHT) reported.
"The damage to the real economy has already been done and the developed world will suffer a major recession, while emerging markets will at least slow sharply," said chief investment strategist Dariusz Kowalczyk at CFC Seymour in Hong Kong, quoted by the IHT.
Said StanChart's Mr Wong: "In the Asia-Pacific region, for example, exports have only begun to slow in the past two to three months, so there is plenty of room for exports to decline further."
