Stock prices in Asia have jumped in early trading after the Bush administration asked the U.S. Congress for $700 billion for a major financial intervention plan.
Major stock indexes in Japan, Korea, Singapore and Taiwan were up between one and 2.5 percent in early trading Monday as news of a government bailout in the United States instilled investor confidence in global financial markets.
Trading in Sydney was delayed by 30 minutes as Australia followed the United States and Britain in banning short selling. The benchmark index (S&P ASX) gained nearly four percentage points in morning trading after the late opening.
After news that a bailout plan was being developed late last week, stock markets around the world recovered much of what was lost earlier in the week. Market analysts said the plan to remove bad loans from the financial system calmed market fears about the future of the economy.
In his weekly radio address on Saturday, Mr. Bush said government intervention in this case is essential because of the risk the crisis in financial markets poses to ordinary American citizens.
The plan calls for the government to purchase bad debt - such as mortgages that cannot be paid back - from U.S. financial institutions, which have lost money after making risky loans.
Mr. Bush says the program requires putting a lot of taxpayer's money at risk, but he said doing so will cost less than doing nothing.
Democrats and Republicans in Congress have agreed to the broad outline of the program. They are meeting in Washington to work out details.
U.S. officials say millions of U.S. mortgage loans are in default or foreclosure. When homeowners can not repay their loans, it damages lenders and investments based on mortgages.
Some information for this report was provided by AFP and Bloomberg.
