Asia Watch

By RAY HEATH
Updated:

 

Chip stocks began to sizzle again in Asian markets today on hopes that the pain for prices and sales was coming to an end.

An overnight jump of more than 2% on Nasdaq reinforced a forecast by Taiwan's United Microelectronics Corporation that recovering world demand would grow earnings later this year.

As the bullish mood spread to other technology driven markets in the region, buying of big Japanese chipmakers underpinned the Nikkei 225 Average, which gained 43.33 points to 13,327.29.

With few technology companies of their own to chase, Hong Kong investors were more worried that the round of interest rate rises was now over, and moved out of property stocks, leaving the Hang Seng index down 104.05 points at 15,756.37.

The surge in chip stocks was also bolstered by an overnight 8% jump in the Philadelphia Stock Exchange's widely followed semiconductor index. This followed a forecast from UMC's US boss that he expected to see chip sales in the second half boosted by growing demand for computers, telecommunications equipment and consumer electronics.

Taiwan led the regional rises as the Weighted Index gained 216.56 to 6104.24. UMC and rival Taiwan Semiconductor bounced up more than 6% while computer manufacturer Acer put on almost 5% on plans to shed labour to cut costs.

Japan stocks, which had been lifted yesterday by calls for the resignation of Prime Minister Yoshiro Mori, continued to firm. Top electronics counters were further boosted by a 54% increase in sales of chip-making equipment in December. Kyocera, a major supplier of machinery to chipmakers, gained 5%.

South Korean and Singapore semiconductor stocks joined the rally. In Seoul, Samsung Electronics, the world's biggest chipmaker vaulted 4%, but buoyant electronics were not to overcome a depressed morning for other blue-chips that left the Kospi down 0.20 points at 603.63.

Singapore's Chartered Semiconductor received a 5% boost from nicely timed news that it was planning to expand production, and the Straits Times index benefited with a 5.39-point gain to 1971.49. In a mixed Hong Kong market, Legend Computer, a major mainland manufacturer of personal computers, stood out with a 2.5% gain, but property developers eased on caution about the outlook for sales this year.

General lack of interest in Malaysia's stock market left the Kuala Lumpur Composite down 4.26 points at 710.28.

Warnings in Thailand that interest rate spreads were too wide for the public's good hit banking shares, but demand for old-economy stocks on earnings hopes left the SET index up 1.25 points at 316.50.

Plans by Indonesia's top telecommunications companies to unwind cross-shareholdings ignited stocks in both companies. PT Telkom jumped 8%, and PT Indosat rose almost 4%, boosting the Composite index 16.45 points to 439.66.

Sharp falls in Australian telecoms stocks pushed down the All Ordinaries index 22.6 points to 3272.2. Investors sold leading network providers on fears that prices had run ahead of realistic profit expectations for the sector.

• Prices and indices in this report are from various sources and calculated at different times and may not always match those listed elsewhere on the site.

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