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Overnight Briefing

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Stocks ends sharply higher

Fri, Sep 19 2008, 06:10 GMT
by Jyske Bank Team

Jyske Bank

• USD rose on rumours

• Asian stocks and U.S. dollar up

• HSBC walks away from 6.3 bln deal

• Oil steady at USD 98

• DEM Producer Price Index

• EUR ECB’s Juergen Stark speaks

American Time Zone:

Stocks end sharply higher

Wall Street rallied in a stunning late-session turnaround Thursday, shooting higher and hurtling the Dow Jones industrials up 400 points following a report that the federal government may create an entity that will take over banks' bad debt.

A report that Treasury Secretary Henry Paulson is considering the formation of an entity like the Resolution Trust Corp. that was set up during the savings and loan crisis of the late 1980s and early 1990s left investors ebullient. Investors hoped a huge federal intervention could help financial institutions jettison bad mortgage debt and stop the drain on capital that has already taken down companies including Bear Stearns Cos. and Lehman Brothers Holdings Inc.

Worries about financial land mines on companies' books have hobbled the world's financial markets and led to the intense volatility in the markets this week.

USD rose on rumours

The dollar rose the most against the yen in a month on speculation the government will create an agency to address turmoil in financial markets.
The yen fell against the high yielders as the prospect of the U.S. Treasury and the Federal Reserve formulating a permanent plan to stem credit market losses encouraged investors to buy higher-yielding assets funded by low-cost loans in Japan.

Oil declined

Crude oil fell after a U.S. Energy Department report showed that natural gas supplies rose more than expected last week.

Far East Time Zone:

Asia stocks, dollar up on hopes for crisis plan

Asian stocks and the U.S. dollar rallied on Friday as U.S. policymakers met to design a broad plan to resolve a crisis that has threatened the global financial system and reshaped the banking industry. Japan's Nikkei share average was up 2.65 %, after plumbing a three-year low on Thursday. Shares of the country's top bank Mitsubishi UFJ Financial leapt 9.2 % after a volatile week.

HSBC walks away from USD 6.3 bln S.Korea bank buy

HSBC the world's second largest bank by market value, said on Friday it dropped a USD billion offer for 51 %of Korea Exchange Bank , blaming the financial market turmoil that has slashed the value of banks and other assets.
"Taking into account all relevant factors including current asset values in world financial markets, HSBC Asia exercised its right to terminate the acquisition agreement with immediate effect," the UK-based bank said in a statement.

Oil steady at USD 98 after dollar jumps on U.S. plan

Oil was little changed at USD 98 a barrel on Friday, supported after two days of gains by growing U.S. and Nigerian supply concerns and a jump in the U.S. dollar as the U.S. government sought a comprehensive solution to the financial crisis.
U.S. light crude for October delivery rose 12 cents to USD 98 a barrel by 0201 GMT, tempting a third day of gains as prices rebounded from a seven-month low of USD 90.51 a barrel on Wednesday

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Published on  Fri, Sep 19 2008, 06:16 GMT