Asian stocks extended their upward march yesterday as investors held their nerve and hoped for a quick and decisive war which would remove some of the uncertainties hanging over the global economy.
Stock investors were cheered by another big fall in oil prices. US light crude fell US$1.45 to US$28.43 per barrel yesterday, its lowest since December 11. It has now fallen by 20.65 per cent in four days. The Hang Seng Index briefly dipped into negative territory after the first reports of anti-aircraft fire over Baghdad. But it quickly rebounded and closed up 35.97 points or 0.39 per cent higher at 9,194.56, taking gains since Monday to 4.4 per cent.
'Everyone is expecting a victory, but the market is becoming more cautious with the worry of possible terrorist attacks and chemical weapons [being used by Iraq],' said Kenny Tang, the associate director of Tung Tai Securities.
Other Asian markets soared as investors bet their economies will rebound faster than Hong Kong's once war worries are out of the way.
Japan's Nikkei 225 index jumped 1.79 per cent, Singapore's Straits Times Index rose 1.8 per cent and South Korean stocks soared 4.92 per cent.
'People are expecting that the US will manage to achieve a swift victory, the consensus is that the war will be about one month or 1.5 months,' said Phillip Securities research director Louis Wong Wai-kit.