LONDON/NEW YORK, Nov 10: China’s $586 billion stimulus plan lifted world stock and commodity markets on Monday and the United States pledged more support for struggling insurer AIG as world governments remained engaged in the economy to battle the global financial crisis.

The activism helped offset the economic gloom that swept through Japan and emerging market nations after Japanese manufacturers reported their biggest quarterly slump in machinery orders in a decade and rating agency Fitch cut Romania’s credit rating to “junk” status in one of four emerging market downgrades.

Fitch said the global financial crisis had put the ratings of South Korea, South Africa, Russia and Mexico in jeopardy and it cut the ratings for Bulgaria, Kazakhstan and Hungary.

But Wall Street opened higher on the China’s weekend approval of a four trillion yuan ($586 billion) spending package to boost domestic demand and help the world’s fourth-largest economy ride out the global credit crisis.

China’s stimulus comes on top of more than $4 trillion in government pledges around the world for bank bailouts, credit guarantees and fiscal spending to contain the damage from the worst financial turmoil in 80 years.

However, some analysts warned the size of the Chinese stimulus may not be as great as advertised.

The United States, where a housing market collapse triggered the crisis, has set aside $700 billion for rescuing financial institutions including AIG.—Reuters