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HONG KONG, Nov 1: Asian stocks followed Wall Street’s lead on Tuesday and closed mostly higher with sentiment also buoyed by a further easing in oil prices, which edged under $60 a barrel, dealers said.
They said volumes remained thin with many markets shut for public holidays and while gains were solid inflationary pressures and the prospect of higher interest rates still loomed over trade.
This was particularly the case in Jakarta and Bangkok where official data showed the cost of living was rising at levels not seen since the aftermath of the Asian financial crisis of the late 1990s.
And the US Federal Reserve is widely tipped to hike rates for a 12th consecutive time when it meets later Tuesday.
Seoul led the day surging 2.66 percent on better than anticipated profit results. Taipei, Hong Kong, Sydney and Wellington also improved.
Trade was drastically cut short in Tokyo due to technical problems but the market still performed strongly following an upbeat economic assessment by the central bank and a cabinet reshuffle.
Singapore, Kuala Lumpur and Manila were closed for public holidays while trading in Australia was curtailed by a holiday in the state of Victoria for the running of the Melbourne Cup.
Mumbai was opened briefly in the evening for ceremonial trade only to celebrate Diwali, the festival of lights.
TOKYO: Share prices shot up 1.92 per cent to close at their highest level for more than four years after an upbeat central bank economic outlook and a cabinet reshuffle.
Dealers said the sharp gains came even after a technical glitch delayed the opening and allowed only 90 minutes of trade.
“Yesterday, the TOPIX was already strong, and investors had expected stocks would rise today (Tuesday). So, even during the suspension, futures were really bullish (positive),” said Hideyuki Suzuki, a strategist at SBI Securities.
Suzuki attributed the market’s strong tone to a cabinet reshuffle by Prime Minister Junichiro Koizumi on Monday seen as favoring reformists as well as the Bank of Japan’s latest report on economic activity and prices.
In its twice-yearly report, the central bank said it expects the economy to escape decisively from deflation by next year. It increased its forecast of economic growth for the year to March 2007 to 1.8 percent from 1.6 percent.
Suzuki said these factors reassured investors that economic structural reform would progress and that Japan’s economy is on the path to recovery
The gains came despite a software glitch that forced the Tokyo Stock Exchange to suspend trading in all shares for the first time ever.
Masayoshi Yano, strategist of Tokai Tokyo Securities Co, said the system trouble did not have a lasting impact on stock prices.
“It shows how strongly the market is moving right now,” he said. “Dealers have such high expectations for the future.”
The Nikkei-225 index rose 261.36 points to 13,867.86, on reduced volume of 1.80 billion shares during the truncated session.
HONG KONG: Share prices closed 1.29 per cent higher on follow-through interest in blue chips such as Hutchison Whampoa and China Mobile, spurred by Wall Street’s advances overnight.
But dealers said gains in selected shares were capped by concerns about the possible spread of bird flu.
“Buying of blue chips, including Hutchison Whampoa and China Mobile, provided much of the support to the market,” said Peter Lai, sales director at DBS Vickers Hong Kong.
“Some punters used the bird flu as an excuse to do some selling, but most investors are not yet too worried, because the spread of the flu is still largely confined to birds,” he said.
The Hang Seng Index closed up 185.89 points at 14,572.26 on turnover of 19.35 billion Hong Kong dollars.
“Investors already expect the Fed to raise rates tonight and this is hardly of concern to them. But they will likely react negatively, if rates are raised beyond 25 basis points,” he said.
Airline stocks were mostly higher as oil prices dropped below 60 US dollars a barrel. Cathay Pacific rose 0.50 to 12.65, Air China was up 0.075 at 2.50 and China Eastern Airlines was up 0.06 at 1.14.
SYDNEY: Share prices closed 0.34 per cent higher, extending gains after another positive performance on Wall Street.
Dealers said turnover, however, was thin due to a public holiday in Victoria for the country’s richest horse race, the Melbourne Cup.
CMC Markets analyst David Land said the market was quiet after Monday’s sharp gain of 1.75 percent.
“With the gold price down quite heavily overnight, the relative strength in the share prices of gold miners demonstrated the underlying positive sentiment among traders for that sector,” he said.
Land said oil stocks were out of favour after crude oil prices dropped below 60 US dollars a barrel in US trade overnight.
“Traders are probably feeling reasonably confident that the oil price will remain quite robust for the time being,” he said.
“Those traders who believe that there is more upside left in the oil price will likely be hesitant to unload their holdings in energy companies for the moment.
“Traders who believe that the oil price will be in a holding pattern or even declining a little into the immediate future will need some encouragement from the oil price before they wade back into the market again.”
The S and P/ASX 200 index rose 15.0 points to 4,474.7. Trade was slow at 568.7 million shares worth 2.06 billion dollars (1.54 billion US).
Mining heavyweights BHP Billiton and Rio Tinto were in positive territory, adding 0.14 and 0.69 to close at 20.89 dollars and 57.00 dollars respectively.
JAKARTA: Share prices closed 0.12 per cent lower in thin trading after the central bank hiked interest rates in the wake of soaring inflation in October.
The Composite Index closed down 1.271 points at 1,064.953. Volume was 838.75 million shares valued at 883.21 billion rupiah (88.3 million dollars).
Financial markets will be closed for the Eid al-Fitr Islamic holiday starting Wednesday. They will reopen Wednesday next week.
Inflation stood at 8.7 percent in October compared to the previous month and 17.89 percent year-on-year, the highest increments recorded since 1998, the Central Bureau of Statistics said Tuesday.
The higher-than-expected figure was driven by higher fuel prices and rising consumption during the Ramadan fasting month, it said.
The data prompted the central bank to raise its interest rates by 125 basis points to 12.25 percent.
“The market didn’t drop much because there weren’t many players around,” said Equity Development analyst Nugraha Adi, warning that the bank could hike rates again this year because of the negative spread between the interest rate and inflation.
Telkom rose 50 rupiah to 5,050 and Indosat gained 100 to finish at 4,975, recovering some of the losses it incurred last week after announcing weak third-quarter results.
WELLINGTON: Share prices closed 0.12 per cent higher, with stocks losing steam after early gains prompted by firmer overseas markets.
The NZSX-50 gross index rose 3.99 points to 3,297.15 on turnover of 92 million New Zealand dollars (64.4 million US).
Telecom fell six cents to 5.77 dollars. The company is expected to report a flat quarterly profit according to analysts’ forecasts.
Carter Holt Harvey was unchanged at 2.50 dollars, after the company’s independent directors reversed their recommendation against acceptance of the 2.50 dollars a share takeover offer from Graeme Hart’s Rank Group.
Hart has already secured 71 percent of CHH and Hamilton Hindin Greene partner Grant Williamson said it appeared to have a chance of securing the 90 percent it needs to move to full control.
Over 5.4 million Carter Holt shares changed hands Tuesday.
CHH’s directors changed their advice after independent adviser Grant Samuel reassessed its valuation of the company in light of last week’s profit downgrade.—AFP
