Markets drift lower ahead of decision from Washington
Hong Kong (AsiaNews) - Asian stocks drifted or dropped today, while doubts are weighing against the financial bailout plan proposed by the American treasury. The Hong Kong stock market rose by only 0.6%; the Tokyo market fell by 0.9%; Kuala Lumpur was also lower. Only the Shanghai stock market posted strong gains, up 4%, boosted by share buybacks on the part of state-owned companies.
Uncertainty remains, even though all of the central banks have made large quantities of money available to the market.
The Bank of Japan has offered about 30 billion U.S. dollars; Australia's central bank injected 1 billion dollars; Hong Kong, about 5 billion dollars. China has reduced its taxes on stock purchases and relaxed loan terms. But the markets aren't responding.
According to various analysts, the uncertainty is prompted to a great extent by the difficulties facing the plan proposed by the U.S. Treasury - amounting to 700 billion dollars - to rescue the American financial system.
Today, Democrat and Republican congressmen are meeting to agree on a course of action. But there are fears that Congress will not approve it, or will approve a changed version.
The Bush administration has warned that without the plan, the American financial system could fall into a crisis similar to that of 1929.
President Bush has also appealed to the country and to legislators, asking Congress to act decisively in favor of the plan to save the American institutions from "economic disaster".
According to some analysts, the bailout plan would be harmful to the economy. They claim that it would tend only to save Wall Street, but would risk compromising economic growth and the value of the dollar for years, and cause an inflationary spiral.
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