Goldman gets Buffett boost amid worries on bailout
HONG KONG (Reuters) - Warren Buffett's $5 billion investment in Goldman Sachs brought good news to global markets worried that architects of a $700 billion bailout plan would not be able to convince U.S. lawmakers to move swiftly.
Sumitomo Mitsui Financial Group <8316.T> also plans to invest in Goldman, Japanese media reported on Wednesday, in what would be the country's third big investment on Wall Street this week as its well-capitalized banks take advantage of global upheaval to expand aggressively abroad.
SMFG, which is Japan's third-largest bank and has a long relationship with Goldman, said the bank had no deal in place.
Stocks in Asia gained slightly and U.S. Treasury yields rose after news of the Goldman stake purchase by one of the world's most respected investors.
CNN reported that the FBI was investigating Fannie Mae , Freddie Mac , Lehman Brothers Holdings Inc and insurer American International Group Inc and their senior executives for potential mortgage fraud.
The bureau was trying to determine whether anyone in those financial institutions had any responsibility for providing "misinformation," CNN reported.
A new Washington Post-ABC News poll, meanwhile, showed that Democrat Barack Obama has opened a 9-point lead over Republican John McCain in the U.S. presidential race amid turmoil in the financial system and growing pessimism about the economy.
The MSCI index of Asian shares outside Japan edged up 0.16 percent, and Tokyo , which was closed on Tuesday for a public holiday, rose 0.2 percent. Stocks in Europe were set to open slightly higher.
"We've still got plenty of uncertainty ahead of U.S. Congress approving the rescue package," said Sarah-Jane Wagg, president director of UBS Securities Indonesia in Jakarta.
Globally, investor nerves are frayed by two weeks of unprecedented financial markets turmoil.
In Hong Kong, Bank of East Asia <0023.HK> was forced to deny rumors questioning its stability, which had sent its shares down as much as 11 percent and drew hundreds of customers to at least one of its branches. The bank said its capital adequacy ratio of 14.6 percent was well-above international requirements.
Buffett's Berkshire Hathaway