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HONG KONG, Sept 14: Asian stocks closed sharply higher on Friday amid a growing conviction the United States will cut interest rates and its economy will escape a major downturn.
Record oil prices and the ongoing credit crunch stemming from the subprime mortgage troubles failed to halt a rally on Wall Street overnight, triggered by hopes for a turnaround in the much maligned US auto industry.
A landmark deal with Detroit auto workers drove Wall Street 1.0 per cent higher and the positive tone spread across Asia where investors have remained all but convinced the US economy is headed for a fall over the subprime issue.
However, the US Federal Reserve is now expected to cut US interest rates by at least 25 basis points next week and a 50 basis point reduction is expected to spark further buying.
TOKYO: Japanese share prices closed up almost two per cent after Wall Street staged a strong rally overnight on hopes for a turnaround in the troubled US auto industry.
Dealers said investors were also encouraged by a softer yen, which boosted export-oriented shares.
The market was also looking ahead to the Federal Reserve’s monetary policy meeting next week, hopeful that the key federal funds rate will be cut by at least 25 basis points.
The Tokyo Stock Exchange’s benchmark Nikkei-225 index of leading shares rose 306.23 points or 1.94 per cent to end at 16,127.42, ending above the key 16,000 points level for the first time in a week ahead of a three-day weekend.
Turnover rose to 2.4 billion shares from 1.56 billion shares on Thursday.
HONG KONG: Hong Kong share prices closed at a record high again, up 1.47 per cent, as property stocks continued to shine on hopes of lower interest rates.
China Mobile also boosted the key index amid talk that mainland authorities may not award 3G licences until next year, sparing huge capital expenditure for the mobile operator in the near term.
SYDNEY: Australian share prices closed up 1.2 per cent as concerns over mortgage defaults in the United States appeared to ease.
The S&P/ASX 200 index closed 76.2 points higher at 6,306.8. Turnover was 1.87 billion shares, worth 6.02 billion dollars (5.0 billion US).
Macquarie Bank’s optimism helped but I think there was less concern about the impact of problems in credit markets,” Ric Klusman, head of institutional trading at Aequs Securities, said.
SINGAPORE: Singapore share prices closed 0.9 per cent higher as investors, buoyed by Wall Street’s overnight rally, bought into property stocks and select blue chips.
The Straits Times Index rose 32.00 points to 3,536.40 on volume of 1.9 billion shares worth 2.1 billion Singapore dollars (1.39 billion US).
KUALA LUMPUR: Malaysian share prices closed 0.4 per cent higher due to bargain hunting following a rally on Wall Street overnight.
Dealers said investor sentiment was boosted on growing hopes the Federal Reserve will cut its federal funds rate at a meeting on September 18.
The market responded well to the rally on Wall Street overnight, said Peter Lim, deputy managing director of SJ Securities.
JAKARTA: Jakarta share prices closed 0.1 per cent higher led by gas distributor Perusahaan Gas Negara (PGN) and Astra Agro Lestari, with some profit-taking capping the index rise.
Dealers said strong buying in PGN was driven by expectations that the company will start operating the second line of its South Sumatra-West Java gas pipeline next month. The composite index closed up 2.86 points at 2,225.61. Volume was 5.32 billion shares valued at 2.94 trillion rupiah ($313.30 million).
Henan Putihrai analyst Prayoga Ahmadi Triyono said the market opened firmer but the absence of strong new leads prompted investors to cash in previous gains.
He expects the market to move sideways early next week and possibly go up later in the week should the Fed cut its fed funds rate.
WELLINGTON: New Zealand share prices rose 0.49 per cent, following the lead of overseas markets.
The NZX-50 index rose 20.25 points to 4,162.68 on light turnover worth 83.5 million dollars (59.4 million US).
There haven’t been a lot of highlights really today,” said Campbell Stuart of UBS.
There hasn’t been a lot of news to grab on to. One of the quietest weeks we’ve had in quite a while.”Market leader Telecom fell two cents to $4.35, against the trend of the broader market.
The company said it was losing another senior executive with the resignation of the chief operating officer of its consumer arm, Kevin Kenrick.
MUMBAI: Indian share prices erased intraday gains to close flat after investors were rattled by Europe’s weak opening on global credit concerns.
Dealers said the benchmark 30-share Sensex index appeared headed for a new record intraday high but the soft European opening alarmed investors.
The Sensex fell 10.64 points to 15,603.8.
The markets saw strong gains intraday but fell as European markets weakened. We may still see record highs next week, said a dealer with brokerage Prabhudas Lilladher.—AFP
