Japanese stocks soared Monday to lead Asian markets higher as investors brushed aside a survey showing business confidence plunged, on hopes for a U.S. interest-rate cut and after the Bush administration said Friday it would step in to prevent a failure of U.S. automakers.
The Nikkei 225 Average, which slumped 5.6% Friday, soared 4.8% to 8,627.45 in the afternoon, while the broader Topix index gained 3.7% to 843.44.
The advance ignored Bank of Japan's tankan survey, which showed business sentiment dropped sharply, with the headline diffusion index for large manufacturers deteriorating at its fastest pace since August 1974, falling 21 points to minus 24. The reading was the worst in nearly seven years.
Hong Kong's Hang Seng Index rose 3.5% to 15,271.19, also rebounding after losing 5.5% Friday, and shrugging off a report in the Financial Times that HSBC Holdings has a potential exposure of $1.5 billion to Bernard Madoff, a former chairman of Nasdaq, who was arrested last week and charged with securities fraud. An HSBC spokesman in Hong Kong declined to comment on the report.
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