China Stimulus Opens Opportunities For Trade Partners -Xinhua

http://www.djnewswires.com/eu China Stimulus Opens Opportunities For Trade Partners -Xinhua

BEIJING -(Dow Jones)- China's stimulus package and ongoing fast economic growth will benefit its trading partners struggling with the effects of the global financial crisis, a commentary by the official Xinhua News Agency said Wednesday.

The article, which was posted on the State Council's Web site a day before China's parliament is due to meet for its annual session, also said the country's massive foreign exchange reserves are a source of hope to financial institutions around the world struggling with inadequate liquidity.

Global finance and money markets benefit from China's policy of keeping the yuan stable, it said.

The column also called on large developing nations to be given a greater role in international financial and economic bodies, and said those countries are the world's best hope for a quick rebound from the crisis.

The author of the column wasn't named.

  Newspaper Web site: http://www.gov.cn

GBP/USD: Cable holding above 1.4000

http://www.djnewswires.com/eu GLOBAL MARKETS: European Stocks To Push Cautiously Higher

  By Peter Nurse
  Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--European stocks are expected to open slightly higher Wednesday, after modest gains in Asia boosted confidence. However, investors are likely to remain very cautious, given continued signs of the extent of the global economic slowdown.

"With some optimism emerging in Asia overnight, expectations are for the European markets to open mostly higher," said Matt Buckland, a dealer at CMC Markets. "Overall, however, there doesn't seem to be a natural turning point now where investors are looking at stocks as being oversold, and the lack of confidence means risks remain heaped on the downside."

Buckland expects European indexes to push higher at the open, with London's FTSE 100 index set to add 32 points to 3544. He also sees Frankfurt's DAX index rising 24 points to 3715, and the CAC-40 index in Paris up four points to 2559.

Gains on the Shanghai Composite Index resulted in a degree of confidence returning to the markets in Asia, with the index posting gains of more than 4% on hopes the start Thursday of the National People's Congress will lead to further announcements on supportive measures for the economy.

China's February Purchasing Managers' Index also came in at 49.0, compared with January's 45.3 release. While a PMI reading under 50 indicates manufacturing activity is still contracting, the release offers some signs it may be nearing bottom.

Japan's Nikkei 225 index followed the more positive tone set by China, pushing out of the red seen earlier in the day to close 0.9% higher.

US Is Still Facing Hurdles In Regulating Financial Giants

For all the federal government’s intervention into the world of business and markets, there’s one thing it still can’t do to stop the bleeding in the financial system—even though a lot of experts would like it to.

Under current law, no regulator has the authority to essentially take over a troubled bank holding company—conglomerates with a wide range of financial operations—the way the government routinely does with smaller, commercial banks.

Both FDIC Chairman Sheila Bair and Fed Chairman Ben Bernanke have made that crystal clear in recent days that even as the government injects more taxpayer capital into giant financial institutions such as Citigroup [C 1.22 0.02 (+1.67%) ] it can't actually shut them down even if officials saw fit and wanted to.

"You simply need a way of calling 'time out,' ” says former Treasury official Robert Glauber, who served during the savings and loan crisis. “They lack that and they know it. I believe you do need this.”

The regulatory framework shared by several different regulators is complicated. But experts and some in Congress even say the loophole of sorts may help explain the incremental approach of both the Bush and Obama administrations in dealing with the financial crisis, regardless of their ideological positions on nationalization.

LATIN AMERICAN MARKETS: Brazilian, Mexican Stocks Finish Higher

By Carla Mozee

Mexican and Brazilian equities held to gains Tuesday as the U.S.' top central banker was grilled about the government's extended bailout of troubled insurer American International Group Inc., a move that contributed to a global sell-off a day ago that left regional markets battered.

The Bovespa, Brazil's benchmark equity index, rose 0.6% to 36,468, with steel, finance, and transportation issues pacing gains. Monday's sell-off pushed the index into negative territory on a year-to-date basis.

The index tracking the largest stock market in Latin America is now down 2.9%, but is still up compared with the benchmark S&P 500 Index .

Mexico's IPC rose 1% to 17,093.25, but remains visiting lows last seen in October.

Argentina's Merval, however, was stuck in the red on Tuesday, declining 1.5% to 922.63 The benchmark finished below the 900-points level a day ago for the first time since early December.

Chile's IPSA reversed course to end down 0.3% to 2,401.61.

Investors watched U.S. Federal Reserve Chairman Ben Bernanke answer questions from U.S. senators about the government's decision to invest another $30 billion in AIG, which, on Monday, unveiled a $61 billion loss for the fourth quarter, the largest loss ever recorded by any corporation. AIG had been given a loan package of $150 billion in November.

Bernanke, who had been called to testify about the country's fiscal position, said without the new funds, AIG would likely fail, which would severely hurt the banking and insurance systems.

ASIA MARKETS: Japan Auto Stocks Mixed After U.S. Sales Tumble

By V. Phani Kumar

Shares of Japanese car companies were mixed Wednesday as investors considered their U.S. sales in February, which despite a drop of more than 35% from a year ago, were better than the slump experienced by the Big Three automakers.

In volatile afternoon trading in Tokyo, shares of Toyota Motor Corp. fell 2.5%, Honda Motor Co. (HMC) lost 3.9% and Nissan Motor Co. (NSANY) added 1.7%, as they continued to gain market share in the U.S., although the downhill trend in sales persisted.

The Nikkei 225 Average added 1.3%, rebounding from intraday lows, after dropping for three straight sessions.

Elsewhere in the region, Australia's S&P/ASX 200 lost 1.6%, South Korea's Kospi climbed 2.7%. China's Shanghai Composite jumped 3.2%, Hong Kong's Hang Seng Index rose 0.7% and Taiwan's Taiex advanced 2.5%.

The decline in the shares came after Toyota's monthly sales in the U.S. dropped 40% year-on-year to 109,583 vehicles, Honda's slid 38% to 71,575 units and Nissan's fell 37% to 54,249 cars and trucks. In comparison, General Motors' (GM) sales plunged 53%, Ford's (F) dropped 48% and Chrysler's by 44%.

In Seoul trading, shares of Hyundai Motor Co. (HYMTF) added 0.7% as the South Korean auto major continued to outperform both the U.S. and Japanese car companies. Hyundai's U.S. sales slipped just 1.5% to 30,621 vehicles in February, helped by higher sales of the Elantra sedan.