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Text by AFP

Latest update : 2008-11-21

After taking a hammering in early trading, Asian stocks closed higher on Friday, fuelled in part by speculation over a massive restructuring of American banking giant Citigroup. European markets were stable at the start of trade.

Asian stocks staged a late turnaround Friday on hopes of a Wall Street rally, despite a steady flow of dismal news on the economy that saw the trading day begin with steep declines.
Dealers said stocks appeared to have been oversold during several days of heavy falls, creating room for a rebound ahead of the weekend.
Tokyo ended 2.7 percent higher, Seoul surged 5.8 percent and Sydney gained 1.9 percent, while Hong Kong was up 4.5 percent by lunch.


London's FTSE 100 index of leading shares opened virtually unchanged at 3,875.09 points when trading began on Friday.
In Paris the CAC 40 rose 0.83 percent to 3,005.19 points while in Frankfurt the Dax was up 0.19 percent at 4,228.31.
"Nobody has seen the market like this before. The market can do funny things though, and when it finally does turn around it is probably going to rally hard," said CMC Markets head of trading James Foulsham in Sydney.
Investors took heart from a report in the Wall Street Journal that Citigroup executives are considering selling all or parts of the US banking giant in a massive restructuring effort, dealers said.
The rebound came despite an unrelenting torrent of grim news on the economy, which one analyst described as "one car crash after another" for markets.
"Whether through panic, speculation, fear or the forced unwinding of positions, we are witnessing mass selling on every level," said GFT derivatives head Martin Slaney in Australia.
"The risk of global economic recession is deepening by the day. The prospect of The Great Depression Two is a genuine one and is plain scaring investors."
Investors were unnerved by news that Democrats in Congress had put off a vote on a bailout for crisis-hit US automakers until at least December, and ordered industry chiefs to come up with a new restructuring plan.
"The delayed action on a US bailout deal for the Big Three automakers is a significant for markets," said Seiichi Suzuki, a strategist at Tokai Tokyo Securities in Japan.
"A bailout deal for the auto industry may help it to survive a bit longer but it would not be a cure-all remedy."
Democrats said the chief executives of the Big Three, criticised for flying to Washington on luxury corporate jets to plead for financial rescue, had not convinced them they could restructure their reeling companies.
"Until they show the plan, we cannot show them the money," House speaker Nancy Pelosi told reporters.
The decision to delay a possible multi-billion dollar rescue for the crippled industry rattled Wall Street, where the Dow Jones Industrial Average plunged 5.56 percent overnight. Weekly US jobless claims shot up to a 16-year high, raising fears of a deep recession.
Investors are worried about the hazy outlook for further steps to tackle the worst financial crisis in decades because president-elect Barack Obama will not take office until late January.
"We are at a very difficult time for markets when the US administration is shifting," said Shinichi Ichikawa, chief equity strategist in Tokyo for Credit Suisse.
"We cannot expect at this time that either the outgoing president or the president-elect will come up with a policy that shows his strong intention to improve the economy fundamentally."
The markets showed little reaction to the Japanese central bank's decision to leave its key interest rate unchanged at 0.3 percent as expected.
Finance Minister Shoichi Nakagawa said Japan was ready to take action if necessary to tackle wild swings in its financial markets,
"Whether it is the stock market or foreign exchange, sudden and extreme changes are not welcomed," Nakagawa told a press conference. "If we see such cases, we must take appropriate and necessary actions."
Singapore announced a 1.5-billion US dollar package to help its businesses gain access to credit amid a recession in the city-state and a global financial crisis.

Date created : 2008-11-21