AIG Rescue Plan

Perhaps the worst is over?


Asian markets partly recover on $85 billion AIG rescue plan

HONG KONG - Asian stock markets partly recovered Wednesday after the U.S. government announced a $85 billion plan to bail out troubled insurance giant American International Group Inc.

Jeremiah Marquez, THE ASSOCIATED PRESS

Wall Street's rise overnight also boosted confidence after Tuesday's huge sell-off in Asia. Japan's Nikkei 225 average rose 1.6 per cent to 11,788 by midday after sinking nearly 5 per cent the day before to its lowest close in more than three years.

South Korea's Kospi climbed 2.7 per cent and Taiwan's benchmark rose 1 per cent.
But Hong Kong's Hang Seng Index was 1.4 per cent lower, while Australia's S&P/ASX 200 shed 0.4 per cent

Investors sent the region's stocks spiraling downward Tuesday, reacting to the upheaval on Wall Street that saw investment bank Lehman Brothers Holdings Inc. file for bankruptcy and Merrill Lynch & Co. sell itself to Bank of America Corp.

But the Federal Reserve helped allay fears of further financial turmoil with a $85 billion emergency loan to shore up AIG, the huge U.S. insurer reeling from billions of dollars in souring mortgage debt.

The Fed said Tuesday it was acting after determining that a disorderly failure of the company, whose financial dealings stretch around the world, could hurt the already delicate markets and the economy.

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