China stocks up 6%

SHANGHAI, Nov 19, 2008 (AFP) - Chinese share prices surged 6.05 percent on Wednesday as bargain-hunters bought up energy stocks, spurring an across-the-board rally after steep losses the previous day, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, rose 115.04 points to 2,017.47 on turnover of 84.20 billion yuan (12.3 billion dollars). It tumbled 6.31 percent Tuesday following a four-day rally.

"The sharp ups and downs in the last two sessions were triggered mostly by short-term players such as private funds," Qian Qimin, an analyst at Shenyin and Wanguo Securities, told Dow Jones Newswires.

Large institutional investors like mutual funds have more or less stayed on the sidelines, he said.

Bargain-hunters snapped up oil firms on hopes that the sharp decline in global oil prices will reduce refining costs and that China is ready to reform its centrally-controlled oil pricing mechanism soon.

The China Daily reported Wednesday that the government is likely to levy a fuel tax soon, citing Han Wenke, director-general of the Energy Research Institute of the National Development and Reform Commission.

"The market speculated the government could relax control on prices of oil product to cushion the impact of weaker demand on refiners as the fuel tax would dent demand for oil products," said Liu Youcheng of Hongyuan Securities.

PetroChina jumped 7.5 percent to 11.91 yuan while Sinopec rose by the 10 percent daily limit to 8.37.

Analysts said the gains would not likely last because market fundamentals remain weak.

"Shrinking trading volume underlies the caution still pervading markets," Amy Lin, an analyst at Capital Securities, told Dow Jones Newswires.

The Shanghai A-share index gained 120.79 points, or 6.04 percent, to 2,119.28 on turnover of 83.9 billion yuan, while the Shenzhen A-share index rose 34.07 points, or 6.17 percent, to 586.54 on turnover of 36.4 billion yuan.

The Shanghai B-share Index rose 7.03 points, or 6.95 percent, to 108.15, while the Shenzhen B-share Index gained 13.32 points, or 5.58 percent, to 251.89.

Tokyo stocks retreat on worries about auto crisis

TOKYO, Nov 19, 2008 (AFP) - Japanese stocks lost ground Wednesday, weighed down by worries about the outlook for the global economy and a crisis engulfing US carmakers.

The Nikkei-225 index benchmark lost 55.19 points, or 0.66 percent, to 8,273.22. The Topix index of all first section issues dropped 8.01 points, or 0.96 percent, to 827.43.

"A strong sense of caution lingers," said Motoki Ichikawa, investment information chief at SMBC Friend Securities.

"The market lacks a clear direction," he said, adding investors were watching for additional economic stimulus measures in the United States as well as a possible rescue for the "Big Three", General Motors, Ford and Chrysler.

US carmakers are pleading for a government bailout but US Treasury Secretary Henry Paulson has so far ruled out dipping into a giant Wall Street rescue package to help them.

"Investors are increasingly wary about the situation because the likely aftermath would be significant if the (US) carmakers collapse," Yukio Takahashi, market analyst at Shinko Securities, told Dow Jones Newswires.

It's not just US carmakers that are feeling the pain. Japan's Nissan Motor chief executive Carlos Ghosn warned the company was likely to make "zero" profits in the second half of the current fiscal year.

"We have to recognise 2009 will be one of the most challenging years for our industry and the whole economy in the last 50 years," he told the Wall Street Journal. Nissan shares ended down 2.81 percent at 346 yen.

Financial shares remained pressured by the credit crunch. Mitsubishi UFJ Financial sank 6.4 percent to 511 yen, Mizuho Financial lost 7.5 percent to 212,500 yen and Sumitomo Mitsui Financial declined 7.9 percent to 314,000 yen.

After the closing bell on Tuesday, Mitsubishi UFJ said its first-half net profits slumped 64 percent, but it was no surprise as the megabank had already warned investors to expect a steep drop in earnings.

Worries about the US auto industry weighed on the dollar, which fell to 96.58 yen, down from 96.89 in New York late Tuesday.

Hong Kong shares close down 0.8 percent

HONG KONG, Nov 19, 2008 (AFP) - Hong Kong shares lost 0.8 percent Wednesday, as property stocks plunged on worries over further job cuts, dealers said.

The benchmark Hang Seng Index ended 100.09 points lower at 12,815.80, after trading between 12,738.53 and 13,179.33 during the session. Turnover was light at 38.91 billion Hong Kong dollars (5.02 billion US).

Kenny Tang, research head at Redford Securities, told Dow Jones Newswires the index would remain volatile in the near term.

"The worsening economic outlook won't support gains in the market. The trend is still heading to the south," said Tang.

The government said Monday the August-to-October jobless rate hit 3.5 percent. Analysts and economists expect it to rise in the coming months as the world financial crisis lingers.

J.P. Morgan said in a research note Tuesday that investors should avoid the property sector.

"Against the backdrop of the fast-deteriorating economy and the poor job outlook, which are of the utmost importance for the property market, we are bearish on the Hong Kong property sector," it said.

The property sub-index fell 1.55 percent. Henderson Land dropped 5.4 percent, while Sun Hung Kai Properties fell 3 percent.

Hong Kong Exchanges & Clearing defied the market downtrend on bargain hunting, rising 0.9 percent.

The bourse operator had fallen 17 percent in the first two days of the week, after Morgan Stanley slashed its target price for the stock Monday.

China Resources Power rose 4.9 percent, Huadian Power gained 3.6 percent and Datang Power jumped 5.5 percent.

Traders said there is growing optimism that fuel costs would fall as the spot price of thermal coal has recently dropped sharply.

Singapore shares close 1.59 percent lower

SINGAPORE, Nov 19, 2008 (AFP) - Singapore shares closed 1.59 percent lower on Wednesday on a lack of confidence in the fate of the US economy, dealers said.

The blue-chip Straits Times Index closed down 26.96 points at 1,665.59.

Indonesian stocks end 0.8 percent lower

JAKARTA, Nov 19, 2008 (AFP) - Indonesian shares ended 0.8 percent lower Wednesday amid lingering concerns over debt problems, dealers said.

The Jakarta Composite Index fell 9.5 points to 1,180.36 in thin trading volume.

Thai shares close 2.73 percent lower

BANGKOK, Nov 19, 2008 (AFP) - Thai share prices closed 2.73 percent lower Wednesday following the regional trend as investors failed to shake off concerns about the state of the global economy, dealers said.

Malaysian shares 0.6 percent lower

KUALA LUMPUR, Nov 19, 2008 (AFP) - Malaysian share prices closed 0.6 percent lower Wednesday as investors remained sidelined on the lack of positive news and sustained fears over the state of the global economy, dealers said.

The Kuala Lumpur Composite Index shed 5.44 points to close at 877.65.