OVERSEAS : Stocks in Tokyo Surge on Hope Gulf Crisis Is Easing
Tokyo stocks soared to their third-largest point gain ever Wednesday, boosting confidence in other Asian markets, amid hopes that volatility caused by the Persian Gulf crisis may be subsiding.
The U.S. dollar ended one yen lower after hectic Tokyo trading, contributing to the advance in stock prices.
The Nikkei share index rose 1,439.59 points, or 5.4%, to 28,112.12 after gaining 496.10 on Tuesday.
On other markets:
* In London, stocks closed little changed after a day of light volume as nerves about the Gulf crisis kept investors mainly on the sidelines. The Financial Times-Stock Exchange 100 closed 5.3 points up at 2,239.3.
* In Frankfurt, West Germany, shares closed generally higher. The DAX index rose 27.15 points to 1,742.20.
From the time Iraq invaded Kuwait through Monday, the Tokyo market had lost 15% of its value, as investors worried over Japan’s ability to absorb an oil shock.
“There comes a point when the market needs to be addressed independently of the Middle East,” said Brad Bauer, broker at Barclay’s de Zoete Wedd Securities (Japan) Ltd. “You have to assume the world’s not going to come to an end.”
An already-surging market was boosted by delayed reaction to a U.S. television report that Iraq had made a conditional offer to discuss withdrawal of its forces from Kuwait. There was no immediate White House comment on the report.
“It would seem the market may be getting used to the fact that the Middle East crisis may turn into a long, hard stalemate,” said George Nimmo, manager of equity sales at SCBI Securities (Asia).
