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Asian stocks rebound as market gloom eases
Fri, Nov 21, 2008
AFP

TOKYO, Nov 21, 2008 (AFP) - Asian stocks staged a late turnaround Friday on hopes of a Wall Street rally, despite a steady flow of dismal news on the economy that saw the trading day begin with steep declines.

Dealers said stocks appeared to have been oversold during several days of heavy falls, creating room for a rebound ahead of the weekend.

Tokyo ended 2.7 percent higher, Seoul surged 5.8 percent and Sydney gained 1.9 percent, while Hong Kong was up 4.5 percent by lunch.

"Nobody has seen the market like this before. The market can do funny things though, and when it finally does turn around it is probably going to rally hard," said CMC Markets head of trading James Foulsham in Sydney.

Investors took heart from a report in the Wall Street Journal that Citigroup executives are considering selling all or parts of the US banking giant in a massive restructuring effort, dealers said.

The rebound came despite an unrelenting torrent of grim news on the economy, which one analyst described as "one car crash after another" for markets.

"Whether through panic, speculation, fear or the forced unwinding of positions, we are witnessing mass selling on every level," said GFT derivatives head Martin Slaney in Australia.

"The risk of global economic recession is deepening by the day. The prospect of The Great Depression Two is a genuine one and is plain scaring investors."

Investors were unnerved by news that Democrats in Congress had put off a vote on a bailout for crisis-hit US automakers until at least December, and ordered industry chiefs to come up with a new restructuring plan.

"The delayed action on a US bailout deal for the Big Three automakers is a significant for markets," said Seiichi Suzuki, a strategist at Tokai Tokyo Securities in Japan.

"A bailout deal for the auto industry may help it to survive a bit longer but it would not be a cure-all remedy."

Democrats said the chief executives of the Big Three, criticised for flying to Washington on luxury corporate jets to plead for financial rescue, had not convinced them they could restructure their reeling companies.

"Until they show the plan, we cannot show them the money," House speaker Nancy Pelosi told reporters.

The decision to delay a possible multi-billion dollar rescue for the crippled industry rattled Wall Street, where the Dow Jones Industrial Average plunged 5.56 percent overnight. Weekly US jobless claims shot up to a 16-year high, raising fears of a deep recession.

Investors are worried about the hazy outlook for further steps to tackle the worst financial crisis in decades because president-elect Barack Obama will not take office until late January.

"We are at a very difficult time for markets when the US administration is shifting," said Shinichi Ichikawa, chief equity strategist in Tokyo for Credit Suisse.

"We cannot expect at this time that either the outgoing president or the president-elect will come up with a policy that shows his strong intention to improve the economy fundamentally."

The markets showed little reaction to the Japanese central bank's decision to leave its key interest rate unchanged at 0.3 percent as expected.

Finance Minister Shoichi Nakagawa said Japan was ready to take action if necessary to tackle wild swings in its financial markets,

"Whether it is the stock market or foreign exchange, sudden and extreme changes are not welcomed," Nakagawa told a press conference. "If we see such cases, we must take appropriate and necessary actions."

Singapore announced a 1.5-billion US dollar package to help its businesses gain access to credit amid a recession in the city-state and a global financial crisis.

Singapore shares close 2.98 percent higher
SINGAPORE, Nov 21, 2008 (AFP) - Singapore shares closed 2.98 percent higher Friday, rebounding with buying in blue chips, dealers said.

The Straits Times Index ended up 48.15 points at 1,662.10 after trading 2.28 percent lower shortly after opening.


Tokyo stocks rebound on hopes of US rally
TOKYO, Nov 21, 2008 (AFP) - Japan's Nikkei stock index closed up 2.7 percent on Friday, reversing early losses as investors hoped for a recovery on Wall Street despite a steady flow of bad news on the economy, dealers said.

The Nikkei climbed 207.75 points to end at 7,910.79. The Topix index of all first section issues rose 20.41 points, or 2.6 percent, to 802.69.

Investors took heart from a report in the Wall Street Journal that Citigroup executives are considering selling all or part of the US banking giant in a massive restructuring effort, dealers said.

The report "triggered speculation that there may be further developments at Citigroup over the weekend that could move the US market positively," Kenichi Hirano, operating officer at Tachibana Securities, told Dow Jones Newswires.

Many analysts, however, remained cautious about the outlook.

"Uncertainties remain over General Motors and Citigroup, while global credit concerns are not seen easing any time soon," said Yumi Nishimura at Daiwa Securities SMBC.

Bank stocks were among the rising shares. Mizuho Financial soared 14 percent to 226,900 yen and Sumitomo Mitsui Financial advanced 8.3 percent to 305,000.

Investors showed little reaction to the Japanese central bank's decision to leave its key interest rate unchanged at 0.3 percent as expected.

Finance Minister Shoichi Nakagawa said Japan was ready to take action if necessary to tackle wild swings in its financial markets.

"Whether it is the stock market or foreign exchange, sudden and extreme changes are not welcomed," Nakagawa told a press conference. "If we see such cases, we must take appropriate and necessary actions."

The Japanese government has in the past intervened in the currency markets, selling yen to help exporters stay competitive.

But Japan's monetary authorities have not intervened in the foreign exchange market since March 2004, allowing the local currency to find its own level against the dollar.


Hong Kong shares close up 2.9 percent
HONG KONG, Nov 21, 2008 (AFP) - Hong Kong share prices closed 2.9 percent up Friday, reversing earlier losses as investors hunted for bargains in financial stocks after four straight days of falls, dealers said.

The benchmark Hang Seng Index rose 360.64 points at 12,659.20. Turnover was 50.44 billion Hong Kong dollars (6.47 billion US).


Chinese shares close down 0.72 pct
SHANGHAI, Nov 21, 2008 (AFP) - Chinese share prices closed down 0.72 percent Friday, following falls in US stocks overnight and persistent concerns about the global economy, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, closed down 14.37 points at 1,969.39 on turnover of 83.8 billion yuan (12.3 billion dollars). However, it had managed to recover early losses after being down 4.28 percent by midday Friday.

Analysts said the market rebounded through a late rally by property firms on speculation that China might significantly ease monetary policy and take new steps soon to support the economy and market.

Beijing often announces major policy changes over the weekend to give markets time to digest the news.

"Investors were showing interest in real estate firms in the afternoon, boosted by hopes that another interest rate cut may lift the sector's earning prospects," said Jacky Zhang, an analyst at Capital Securities.

China Vanke, the country's top listed real estate developer, rose 4.4 percent to 6.92 yuan.

However, the late surge of enthusiasm was less pronounced in the broader market, which remains cautious over the longer-term health of the Chinese economy, analysts said.

"It seems that some investors aren't that rational when they rush to buy stocks on mere speculation of policy changes," Chen Huiqing, an analyst at Huatai Securities, told Dow Jones Newswires.

"The fundamentals of the economy remain worrisome," she said.

Coal firms had some of the biggest declines on concerns over slowing global energy demand. China Shenhua Energy, the country's biggest coal miner, fell 3.5 percent to 17.92 yuan.

The Shanghai A-share index lost 15.02 points, or 0.72 percent, to 2,068.75 on turnover of 83.4 billion yuan, while the Shenzhen A-share index slid 4.55 points, or 0.78 percent, to 581.5 on turnover of 37.5 billion yuan.

The Shanghai B-share Index fell 1.87 points, or 1.74 percent, to 105.92 while the Shenzhen B-share Index lost 0.57 points, or 0.23 percent, to 248.09.

 

 
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