Asia Watch

By RAY HEATH
Updated:

 

Asian stock markets began to undo some of the damage done by skidding tech stocks late last week. European Central Bank support for the euro, which had gained 4% on Friday, and the fall in oil prices that followed the United States' decision to open its oil reserves, brightened the mood.

The euro was holding at around 0.88 US cents on the Tokyo foreign exchange markets, slightly up from the 87.58 cents at which it closed last week. Friday's late show of relative strength on Nasdaq, a reassessment of sales warnings by chipmaker Intel, and a feeling that the hammering of stock prices had been over-done, also brought the buyers back to Hong Kong, Tokyo and South Korea, although Taiwan was still looking fragile.

After losing more than 1600 points, or over 10%, last week Hong Kong led the rebound. Bargain-hunters moved in on blue-chips and recently savaged technology and telecom stocks, and the Hang Seng index crammed on 725.44 points to 15338.32, or nearly 5%, by the end of the morning. Stocks that led the market down last week were among the biggest gainers.

HSBC Holdings set the pace for blue chips, jumping HK$5 to $108. Hutchison Whampoa, Hong Kong's largest conglomerate, rose $4 to $102 and property giant Cheung Kong gained $3.25 to $92.50.

Internet and telecoms player Pacific Century Cyberworks pulled out of the dive triggered by last week's sales of a 4.9% stake by Cable & Wireless, and recovered to HK$9.30 from its Friday closing of $8.75.

In Tokyo, the Nikkei 225 recovered 174.65 of the 492 points it lost on Friday to close at 15992.90. The euro support gave a boost to Japan's exporters, whose earnings have been eroded by the currencies long term decline. Stocks in consumer electronics makers moved higher. Big gainers in the hi-tech sector included Sony, Toshiba, NEC, Mitsubishi Electric and Fujitsu.

The widening view that Intel's problems were not affecting the rest of the semiconductor industry helped chip equipment makers Advantest and Tokyo Electron.

Similar sentiments were pushing semi-conductor stocks in South Korea, where market leader Samsung led the charge with a 5% gain. Further plans by the government to intervene into the economy also encouraged buyers back into the market - which had slumped more than 7% on Friday. The Kospi index rose more than 5%, adding 29.83 points to 583.08.

Taiwan investors, after a jittery start, were encouraged by a statement from the giant Taiwan Semiconductor group that Intel's problems were not affecting sales. The Weighted index gained 65.37 points at 6677.46.

South-East Asian markets were boosted by the currency and oil price news, and stronger tech stocks. In Singapore, the Straits Times index rose 2.19% or 42.27 points to 1975.26, its first gains since the beginning of the month. Thailand's SET index edged up 2.59 points to 276.73, while Indonesia's Composite put on 6.91 points to 413.83. The exception was Malaysia, where the Kuala Lumpur Composite lost 8.73 points to 730.84.

Australian stocks followed Friday's late strength on Wall Street, although telecoms stocks were slipping, but the All Ordinaries gained 22.60 to 3166.10.

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