Accessibility links

Asian Stocks Rise in Response to US Rally

Asian markets are rallying Wednesday as investors cheer the welcome news from U.S.-based financial giant Citigroup.

Japan's key Nikkei index finished more than four percent higher, one day after posting its worst close in 26 years. Prices are also surging in Hong Kong, Shanghai, Sydney and Wellington.

The Asian surge extends Tuesday's rally on Wall Street, which was boosted after Citigroup officials announced the firm was profitable in the first two months of 2009.

U.S. stocks rose as much as seven percent from what had been 12 year lows. European shares also posted strong gains of about five percent.

Financial stocks led the rallies after being hammered in recent months by the world economic crisis.

International Monetary Fund chief Dominique Strauss-Kahn warns the world economy will probably shrink this year.

Also, the head of the U.S. central bank says a sustainable economic recovery will "remain out of reach" without a comprehensive overhaul of financial regulations. Federal Reserve chairman Ben Bernanke says both the U.S. and world economies will continue to struggle if policymakers do not strengthen the financial system as a whole.

Citigroup, at one point, was the world's largest bank. However, it has been hit hard by the global recession and has received more than $45 billion in government aid. In an internal memo, Citigroup chief Vikram Pandit says the firm has an operating profit of more than $8 billion so far this year.

Meanwhile, a report from the U.S. Commerce Department Tuesday shows the recession is still hurting the economy.

Some information for this report was provided by AP.