Stocks Stage Solid Rallies Across Asia and Europe

Foreign stock markets were broadly higher Monday while the U.S. market was closed in observance of the Rev. Martin Luther King Jr.’s birthday, but early today many Asian markets slid again.

Buying on Monday was heavy enough to lift some battered Asian markets 6% to 10% for the day, continuing last week’s rebound:

* The main Thai stock index surged 9.9% on expectations that the International Monetary Fund, overseeing the Thai economic bailout, will ease limits on public spending it originally imposed and let Thailand cut interest rates.

* In Malaysia the main share index leaped 9.1% as investors cheered remarks by IMF officials last Friday that the country doesn’t need a bailout.

* In troubled Indonesia the benchmark index gained 6.1% to its highest level in three months. South Korea’s main index rose 6.6% to 528.77 points, the highest close since Nov. 6.

* Buyers also were in control in Tokyo, lifting the Nikkei-225 stock index 1.3% to 16,262 points amid hopes that government stimulus efforts will spur the Japanese economy. Hong Kong stocks also advanced, as the Hang Seng index jumped 5.6% to 9,400.

Strong performances in Asia helped give most European and Latin American stock markets a boost on Monday. The main German share index surged 2.4%. In Mexico City the key index was up 2.2% to 4,773, and Brazil’s main index gained 3.2%.

But by late morning today Asian stock markets were going their separate ways, as local traders began concentrating on the problems facing individual countries rather than the region as a whole.

In Indonesia stocks were down 1.2% in late morning as the country’s currency, the rupiah, fell again, on fears that the government will lack the will to impose harsh IMF austerity measures as part of a $43-billion bailout package.

The rupiah dropped 7.2% by late morning to 10,450 per U.S. dollar. That was nearing its record low of 11,200 set on Jan. 9.

In other Asian trading early today Thai stocks were down 1.8%, Malaysian stocks were down 1.1% and South Korean shares were off 0.5%. But Tokyo’s market was up 0.7% to 16,382.

In Malaysia today Finance Minister Anwar Ibrahim said the country’s interest rates may have to increase further in a bid to rein in credit growth, as part of an economic recovery plan.

“There is certainly the possibility of an increase,” Anwar told reporters.

The South Korean won fell today as companies chased dollars to settle import deals. The won fell to 1,616 to the dollar early in the day from 1,584 on Monday.

On Wednesday a South Korean delegation is scheduled to meet with leading banks in New York to discuss ways to alleviate a short-term debt crunch. South Korea owes about $92 billion in loan payments this year, including $35 billion due in the weeks ahead.

Standard & Poor’s revised its credit-watch implications to “developing” from “negative” on the foreign-currency ratings of Korea Electric Power, Korea Telecom, Pohang Iron & Steel and SK Telecom.

More pivotal to Wall Street’s fortunes this week may be the profit reports due from major American companies with considerable exposure to Asian markets, including Chase Manhattan and Citicorp, which will report their results today. Last week the Dow Jones industrial average gained 2.3% to close Friday at 7,753.55.