Asian stocks bounced 5 percent from a four-year low on Monday after policymakers around the world took increasingly bold steps to rescue the financial system, including guaranteeing bank desposits and taking stakes in banks.
However, the yen stayed firm against the US dollar and gold also edged up, highlighting investor caution and an unwillingness to dive back into risk-taking just yet, especially with credit markets still barely functioning.
Major European stock markets were expected to open as much as 5.3 percent higher, according to financial bookmakers, and US stock futures rose 4.9 percent after the US government said it would inject capital directly into financial institutions, and European leaders hatched a plan that included buying bank debt.
Global equity markets were gutted last week, and investors even liquidated positions in safe havens like government bonds for cash, on dwindling hopes that anything could be done to keep the global economy from sliding into recession.
The MSCI index of Asia-Pacific stocks outside Japan climbed 5 percent after slumping by more than a fifth last week to the lowest since December 2004.
Australia's benchmark S&P/ASX 200 index ended 5.6 percent higher, clawing back some of last week's 16 percent decline, on a blanket guarantee of all bank deposits from the Australian government.
Hong Kong's Hang Seng index climbed 3.2 percent after losing 16.2 percent last week. China Mobile shares were the biggest boost to the index, and large bank stocks rallied after dipping earlier in the session.
Japan's markets and the US Treasury market were closed for holidays on Monday.
The yen dipped against the euro as equity markets rallied though it was steady against the US dollar. The euro rose to 136.22 yen after trading at 134.97 yen late in New York on Friday. The US dollar slipped a bit to 100.20 yen down from 100.64 yen on Friday.
The price of spot gold rose 1.8 percent to $862.40 an ounce, helped by the weaker US dollar against the euro, after tumbling 7 percent on Friday as investors closed out of positions and stayed on the sidelines. - Reuters