Page last updated at 09:40 GMT, Monday, 13 October 2008 10:40 UK

Markets rally after crisis talks

Hong Kong traders, file pic
Several Asian markets opened higher after a weekend of crisis talks

East Asian markets have reacted positively to efforts by world leaders to end the recent financial turmoil.

Hong Kong's share index rose by 10.2%, and shares in Australia, China, South Korea, Singapore and also rose significantly.

Japan's stock market was closed for a public holiday.

Internationally, central banks made extra funds available over the weekend to try to throw a lifeline to financial institutions before markets opened.

Finance ministers from the main industrial nations - the G7 - approved a five-point plan to unfreeze credit markets, and a number of countries announced individual rescue packages.

Mixed picture

Australia's benchmark index ended nearly 5.6% higher and South Korea's main Kospi index finished up 3.8%.

Hong Kong's market closed up 10.2% and the Singapore market rose more than 5%.

Shanghai's benchmark index rose 3.65% after falling earlier.

But Taiwan's index closed down 2.15% after the market was shut on Friday for a national holiday.

Indonesia's key index, down sharply in early trade, gained 0.9% after the lifting of a trading suspension imposed last Wednesday amid falling share prices.

The BBC's Quentin Sommerville in Beijing says Asian stock markets have obviously taken some comfort from the global scramble to protect the world's banks.

But Asian investors remain worried that even if Europe and the US resolve their banking crises, their underlying economies are slowing down, our correspondent says - which is bad news for Asian exports.

Poor at risk

Over the weekend, European leaders pledged to guarantee loans between banks until the end of 2009, and said they would put money into them by buying preference shares.

The plan was welcomed by the head of the International Monetary Fund, Dominique Strauss-Kahn, who said he thought "the comprehensive response to the crisis" would be reflected in Monday's market performance.

But even as attention focused on rescue plans for nations of the rich West, the head of the World Bank, Robert Zoellick, warned that the global crisis could hit developing countries even harder.

"The poorest and most vulnerable groups risk the most serious - and in some cases permanent - damage," he said.

Some developing country officials are concerned the crisis will lead to aid cuts, says the BBC's economics correspondent, Andrew Walker.

The IMF, which has $250bn available to lend, says there has been an incredible increase in the number of countries asking for help in the last two weeks, our correspondent adds.

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