US stimulus plan lifts stocks on first trading day in Year of Ox The Year of the Ox got off to a blazing start yesterday as investors rushed headlong into the stock market after an US$819 billion stimulus bill passed a key vote, signalling help was on the way for the stagnant United States economy. The Hang Seng Index jumped 575.83 points or 4.58 per cent to 13,154.43, marking its largest advance to start a Lunar New Year in more than a decade. All but one of the index's 42 blue chips joined the rally. The benchmark opened 981.47 points higher as trading resumed for the first time this week and investors scrambled to catch up with a global rally. Buying interest picked up even further after the US House of Representatives approved President Barack Obama's stimulus plan, bringing the economic recovery package closer to reality. Investors were also encouraged by more talk about the new administration creating a so-called bad-bank that would soak up toxic assets in the financial system. 'The right things are starting to happen so the markets are responding,' said Howard Gorges, a vice-chairman at South China Securities. 'It does help to put a bit of backbone in the markets, not to be too bearish, because things are happening.' Markets in the region yesterday added on to their gains recorded earlier this week, with Japan climbing 1.79 per cent, South Korea 0.74 per cent and Malaysia 0.4 per cent. However, US and European stocks were lower after the release of grim economic figures in the US. By midday trading, the Dow Jones Industrial Average was down 100.28 points or 1.2 per cent, the S&P 500 Index fell 14.41 points or 1.65 per cent and the Nasdaq Composite Index lost 26.25 points or 1.68 per cent. London was down 114.68 points or 2.67 per cent while Frankfurt fell 93.11 points or 2.06 per cent in late afternoon trade. Mainland markets remained closed yesterday for the Lunar New Year holiday and will resume trading on Monday. In Hong Kong, financial stocks led the way with big gains after being battered down for much of the year so far. HSBC Holdings surged 8.96 per cent to HK$62.60 as it extended its advance for a third day. The mainland's leading insurers Ping An Insurance (Group) and China Life Insurance jumped 6.59 and 4.27 per cent, respectively. 'Market movement will swing between fear and hope,' said Ben Kwong Man-bun, the chief operating officer at KGI Securities. 'Now the market has just factored in some positive hope and that helps move it up.' The Hang Seng Index's advance yesterday was the second-largest to kick off the Lunar New Year since it surged 14.33 per cent at the start of the Year of the Tiger in 1998. Ronald Arculli, the chairman of Hong Kong Exchanges and Clearing, said the market would 'face another challenging year in 2009'. And even after yesterday's stunning rally, the benchmark is still down 8.57 per cent so far this month and is set to close the book on its fifth monthly decline in the past six months. 'Market sentiment has improved a little bit,' said Patrick Yiu Ho-yin, an associate director at CASH Asset Management. 'But in the second half of next month, investors will be concerned about corporate earnings.' The Hang Seng Index might trade between 12,700 and 13,900 points in the near term, Mr Yiu said. Investors will continue to track overseas markets and may take profit if the global rally started earlier this week shows signs of slowing down.