Optimism over China's massive US$586-billion bailout package helped drive the Toronto stock market up more than 92 points Monday, but Wall Street had the opposite reaction.
Toronto's S&P/TSX composite index finished up 92.59 points to 9,688.80.
But in the U.S., the Dow Jones industrial average fell 73.27 points to to 8,870.54 , while the Nasdaq composite index dropped 30.66 points to 1,617.74, and the S&P 500 was down 11.78 points to 919.21.
The U.S. markets pulled back Monday as declines were registered in key sectors such as energy and big manufacturers.
"There are still tons of bad news out there and that's not going to be solved by this Chinese stimulus plan," Joe Saluzzi, co-manager of trading at Themis Trading, told Reuters. "If the Chinese have got to put up a stimulus package, it tells me they've got issues."
Although North American markets saw declines, China's announcement did prompt strong rallies in Asia and Europe.
According to a statement posted on the Chinese government's website Sunday, the government plans to loosen credit conditions, cut taxes and embark on a massive infrastructure spending program.
The plan is part of "a wide-ranging effort to offset adverse global economic conditions by boosting domestic demand."
China says the money from the stimulus package will be spent over the next two years to finance programs in 10 major areas including on low-income housing, rural infrastructure, water, electricity, transportation, the environment and technological innovation.
It will also be spent on rebuilding efforts following several disasters, most notably the May 12 earthquake.
The statement did not indicate how much of the money will be allocated for new projects and how much will be spent on ventures already in the works.
The stimulus package comes as China's export-driven economy has begun to feel the impact of the economic slowdowns in the U.S. and Europe.
In the third quarter of 2008, China's economic growth slowed to 9 per cent, the lowest level in five years.
CTV's Beijing Bureau Chief Steve Chao said Monday that the Chinese are happy about the package.
"There's a great deal of excitement and a belief that the government is there and will protect the people and will try to boost the economy during these volatile times," Chao told 麻豆影视net Monday from Beijing.
Here's the closing numbers for markets in Europe and Asia:
- London's FTSE 100 rose 1.45 per cent, Germany's DAX added 1.76 per cent, and France's CAC-40 rose 1.06 per cent.
- Shanghai's composite stock index surged 7.3 per cent, while Hong Kong's Hang Seng added 3.5 per cent and Japan's Nikkei closed with a gain of 5.8 per cent.
With files from The Associated Press
