Asian markets rebound on China rate cut hopes

(RTTNews) - The stock markets across the Asia-Pacific region closed mostly higher on Friday, ending a four-day losing streak. The markets started off lower, tracking Wall Street's decline to multi-year lows overnight, but rebounded in afternoon trading on speculation that China would further adjust interest rates. A Wall Street Journal report that executives at Citigroup were now weighing the possibility of auctioning off pieces of the financial giant or even selling the company outright also added to the positive sentiment. Oil prices bounced back above $50 a barrel from a three-and-a-half-year low in Asian trading on Friday.

In currency trading, the U.S. dollar pared most of the earlier losses to trade in the upper 94-yen range in late Tokyo deals. In South Korea, the won closed firmer at 1,495.0 a dollar. The Chinese yuan strengthened to 6.8325 a U.S. dollar in late afternoon deals. The Australian dollar closed weaker at US$0.6212-0.6216 and the kiwi ended lower at US$0.5288.

The Japanese stock market closed higher, ending a three-day losing streak. Tokyo stocks opened sharply lower, but rebounded in the after noon session on short covering following gains in U.S. stock futures and a recovery in other Asian markets. The benchmark Nikkei 225 Stock Average closed up 207.8 points or 2.7% at 7,910.8 and the Topix index of all the Tokyo Stock Exchange First Section issues rose 20.4 points or 2.6% to 802.7.

The Bank of Japan's Board of Governors on Friday voted to keep the overnight call rate unchanged at 0.30%, the central bank said at the conclusion of its two-day monetary policy meeting in Tokyo. In a statement accompanying the rate decision, the board maintained its view that the Japanese economy is increasingly sluggish and is expected to remain that way for several quarters. In its previous meeting on October 31, the bank had lowered rates by 20 basis points from 0.50%.

Some major bank stocks posted sharp gains. Mizuho Financial Group jumped 13.9%, Sumitomo Mitsui Financial Group gained 8.3%, and Mitsubishi UFJ Financial Group rose 2.5%.

A stronger dollar lifted Japanese auto and high-tech exporters. Toyota Motor added 4.6%, Sony surged 5.6%, Canon climbed 3.3%, Kyocera gained 4.7%, and industrial robot maker Fanuc soared 13.4%.

Phone Company NTT Corp. rose 5.2% after it said Thursday that it intends a 100-for-1-share split in January 2009 to eliminate fractional shares before the introduction of electronic stock certificates next year. The company noted that stock exchanges in Japan would halt trading in its shares from December 25 to 30.

The South Korean stock market surged nearly 6%, with the key index closing above the 1,000 mark, as shipbuilders and carmakers rallied on bargain hunting following speculation of a Chinese interest rate cut during the weekend. The benchmark Korea Composite Stock Price Index or KOSPI finished up 55.0 points or 5.8% at 1,003.7 after hitting a low of 914.0. The key index also ended an eight-day losing streak. For the week, the key index has lost 7.8%, but it finished 12.4% above the October 27 low of 892.2.

In economic news, South Korea's exports plunged 14.3% to US$17.63 billion during the first 20 days of November from a year earlier due to deteriorating overseas business conditions, according to the preliminary data provided by the Knowledge Economy Ministry and the Korea Customs Service.

Meanwhile, the National Statistical Office reported that South Korea's average household income grew at a slower pace in the third quarter amid worsening economic conditions. According to the report, South Korean households earned a monthly average of 3.46 million won during the July-September period, up 5.5% from 3.28 million won a year ago.

Automakers and shipbuilders led gainers. Hyundai Motor surged 14.8% and Kia Motors gained 10.5%. Among shipbuilders, Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering jumped 14.8% each.

In the tech sector, LG Electronicsjumped 11.0% and Hynix Semiconductor gained 4.2%. Lotte Chilsung advanced 3.0% on speculation that the country's leading maker of soft drinks wanted to take over Korean beer maker Oriental Brewery from Belgium's InBev. Lotte Chilsung denied rumors in regulatory filings.

Among telecom stocks, SK Telecom slipped 0.2% and KTF fell 3.1%.

The Chinese stock market ended a volatile session lower amid speculation about an interest rate cut during the weekend and suspected government buying of shares. The benchmark Shanghai Composite Index fell 0.7% or 14.4 points to 1,969.4. For the week, the key index has lost 0.9%. The market started off weak, dipping 4.5% by the midday break after Wall Street plunged overnight, but recouped most of the losses over the course of the trading session.

Property developers rose, with Poly Real Estate jumping 6.5% and China Vanke advancing 4.4%. But airlines fell as oil prices rebounded above $50 in Asian trading. China Eastern Airlines plunged 6.6% and China Southern Airlines shed 4.7%.

Market heavyweight PetroChina slipped 0.5%, while oil refiner Sinopec closed unchanged.

The Australian stock market ended its four-day losing streak and closed higher, rebounding from five-year lows, as bargain hunting emerged in the afternoon session. Investors scooped up mining stocks following their recent sharp falls. The benchmark S&P/ASX 200 index closed up 63.6 points or 1.9% at 3,416.5, the day's high, after falling more than 4% to its lowest level since December 17, 2003 of 3,217.5 in early trade on the back of a weak lead from Wall Street. For the week, the key index has lost almost 9%. The broader All Ordinaries index finished up 54.3 points or 1.6% at 3,386.9.

On the economic front, investors had little reports to digest on Friday.

Miners led the late-afternoon surge, with the material sub-index jumping 4.6% for the day. Fortescue Metals soared almost 40% after the iron-ore producer said it had secured fresh orders from its main customer, China. Index leader BHP Billiton gained 3.8% and Rio Tinto jumped 4.8%. Among gold miners, Newcrest Mining surged 13.2% and Lihir Gold climbed 10.8%. In the energy sector, Woodside Petroleum pared its losses, but closed down 5.4% and Oil Search shed 6.8%, while Santos advanced 1.2%.

Among banks, Commonwealth Bank jumped 5.6%, ANZ Banking Group rose 2.8%, National Australia Bank climbed 1.0% and Westpac surged 4.8%. Investment bank Macquarie Group edged up 0.2%.

Retailers also posted gains, with Woolworths advancing 3.7%, David Jones adding 0.4% and Coles owner Wesfarmers rocketing 11.8%.

AGL Energy gained 3.3% after Australia's largest energy retailer had its credit rating outlook upgraded to stable following the completion of an asset sale program. Nexus Energy plunged 9.9% after it said that it had terminated an agreement for the supply of a floating production and storage ship for the Crux liquids project in Western Australia.

The New Zealand stock market closed in negative territory for a fifth day on Friday. After a weak start, the market extended its losses amid growing fears about a global economic slowdown. The benchmark NZX 50 index closed down 66.6 points or 2.5% at 2,578.1 after falling 2.3% on Thursday. The broader NZX All Capital index shed 63.5 points or 2.4% to 2622.0.

In economic news, Statistics New Zealand reported that short-term overseas visitor arrivals decreased 3% year-over-year to 173,900 in October and that the total value of electronic card spending in New Zealand rose a seasonally adjusted 0.5% in October compared to a 0.8% increase in September.

Among market leaders, Telecom fell 3.0%, Fletcher Building lost 1.1%, and Contact Energy plunged 6.0%.

Freight and logistics company Mainfreight dropped 2.6% after it posted a 9.5% increase in half-year net profit of NZ$17.2 million before non-recurring items. According to brokers, the result was below their expectation.

Other major losers included Sky City 3.6%, Nuplex 4.2%, Port of Tauranga 4.7%, New Zealand Oil & Gas and Sanford 1.7% each, Auckland Airport 1.8%, and Fisher & Paykel Healthcare 1.0%.

Bucking the trend, Tower rose 0.7% after the company posted a 17% rise in full-year net profit after tax to NZ$40.5 million. Other gainers were Cavalier 2.4%, Hallenstein Glasson 2.2%, Ryman Healthcare 3.7%, Rakon 3.0%, and Vector 1.0%.

Other Asian markets:

Hong Kong's Hang Seng index closed up 2.9% at 12,659; Taiwan's Taiex closed up 2.0% at 4,171; Singapore's STI closed up 3.0% at 1,662; Indonesia's Jakarta Composite Index closed down 0.8% at 1,146; Malaysia's KLCI closed up 1.6 points at 866; and India's Sensex closed up 5.5% at 8,915.

For comments and feedback: contact editorial@rttnews.com Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index