May 24, 2024

Asian Stocks Rise on News of Bin Laden’s Death

HONG KONG — U.S. stock futures rose and the price of oil, gold and silver fell Monday as news of Osama bin Laden’s death eased global security concerns, at least for the moment.

In Asia, the Japanese and South Korean markets, which were already 1 percent higher in the morning, rose further after President Barack Obama announced that U.S. forces had killed bin Laden in Pakistan.

The Nikkei 225 index gained 1.6 percent and the Kospi by 1.7 percent by the close. This took the Nikkei to 10,004,20 points, the first time it vaulted the 10,000-point mark since the devastating earthquake and tsunami that struck the country on March 11.

Still, compared to the enormous political and psychological significance of bin Laden’s death, the stock market reaction was relatively muted.

“News of the death of Osama bin Laden has had a limited impact on regional asset prices,” analysts at Royal Bank of Canada summed up in a note on Monday.

The stock market in Australia, in fact, ended the day nearly flat after paring earlier losses.

In India, the Sensex index was 0.6 percent lower by midafternoon amid widespread expectations that the Indian central bank will once again raise interest rates on Tuesday in a bid to tame rising inflation. And in Pakistan, the Karachi Stock Exchange 100 index dropped 0.6 percent.

Most other stock markets in the Asian region, including Singapore, Hong Kong and mainland China, were closed for a public holiday.

Futures on the Standard Poor’s 500 Index, meanwhile, rose 0.8 percent by midafternoon in Asia, indicating that Wall Street would extend the gains seen last week when trading begins later in the day.

In early trading on Monday, the German stock market was up 0.8 percent, while French stocks were 0.7 percent higher. Britain’s markets were closed for a public holiday.

Some of the sharpest reactions to the news of bin Laden’s death were in the commodities markets.

The price of oil, which has been rising steadily for months amid the unrest in the Middle East and North Africa, sagged 1.3 percent on Monday.

Many analysts cautioned, however, that bin Laden’s death could stoke, rather than ease, worries about oil supplies and global security in the longer run if it led to retaliatory attacks.

“This is a positive development in the campaign against terrorism,” said Jonathan Ravelas, chief market strategist at Banco de Oro Unibank in Manila told Bloomberg News. “In the last 10 years, bin Laden’s presence has been a serious threat to global stability. The flip side is this could be followed by retaliation activities from his supporters.”

Gold, which had hit a new record of $1,575.79 an ounce earlier on Monday, fell 0.6 percent at $1,554.80 per ounce by midafternoon in Asia. The precious metal, which is seen as a safer investment and tends to rise during times of rising inflation and global unrest, has been hitting successive record highs in recent weeks.

Silver sagged more than 10 percent before recovering somewhat to trade about 6.5 percent lower, at $44.70 per ounce, by midafternoon in Asia.

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