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Asian stocks surge raising hopes that credit crisis might be over

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by Kay Mitchell

In early trading this morning, Asian stocks surged as investors hoped that the worst of the credit crisis may be over.

Strong demand for a Lehman Brothers securities offering, in spite of concerns it could face similar problems to rival Bear Stearns, boosted confidence.

Bank shares led stock markets higher, lifting Japan’s benchmark Nikkei 3.7% and shares in the rest of Asia 1.5%. Hong Kong’s Hang Seng index soared 4.4% to 24,154.75.

The Shanghai Composite Index rose more than 3% and stock indexes in Australia, the Philippines, Singapore, South Korea and Taiwan all gained over 2%.

Francis Lun, a general manager at Fulbright Securities in Hong Kong, said investors believe the credit crisis in the US is over.

Gold regained some strength on a technical rebound after declining to a 2-month low yesterday, when the rise in the dollar and the US stock rally triggered selling in precious metals. Gold rose to $889.30/890.10 an ounce from $884.20/885.40 late in New York.

Furthermore, yesterday saw an announcement from UBS who said its write-downs have more than doubled to about $37 billion (£18.5 billion).

However, shares in UBS improved and dragged most of the UK banks higher on the fact that the write-downs were larger than expected and that this could signify the end of the credit squeeze.

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News posted: April 2, 2008

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