Nikkei higher on call for Mori to quit, S.Korea shares also rebound; Hang Seng rises slightly
By Bill Clifford & Mariko Ando, CBS.MarketWatch.com
3:37 AM ET Feb 14, 2001
TOKYO (CBS.MW) -- Japanese shares opened sharply lower Wednesday, but managed to end in positive territory after local media reported that a senior member of Japan's ruling coalition had called for Prime Minister Yoshiro Mori to quit.
Other Asian stock markets traded mixed and in narrow ranges, as investors digested remarks of U.S. Fed chief Alan Greenspan's remarks that U.S. interest rate cuts helped alleviate economic malaise but had not cured it.
The Nikkei ended a volatile session up 0.07 percent, or 9.36 points, at 13,284.06, after briefly trading below this year's closing low of 13,138.23.
The gauge at once rose as high as 13,406 points, or 130 points, as investors welcomed news that opponents and critics alike had called for Mori's resignation. Critics assail his leadership of a foundering economy, blighted by what they see as the emergence of a new banking crisis.
The Nikkei initially reacted positively to hints of Mori's possible resignation, but later gave back most gains on concern it may not happen as soon as hoped.
"It's hard to foresee the timing of Mori's resignation. But in any cases, his resignation will be positive news to the market, where investors are giving thumbs-down to his lack of leadership and inability to handle an emergency," said Masatsugu Nakagawa, senior portfolio manager from Kokusai Asset Management.
Mori's resignation could boost the Nikkei by some 2,000 points, some analysts say.
"The Nikkei might recover to around 15,000-points level on Mori's departure. But it'll depend on how his successor handles the economic policies that will move the index up or down in the long-term," Nakagawa said.
In Tokyo, some beaten-down bank shares continued to rebound since Tuesday's largely symbolic trimming of Japan's official discount rate. Asahi Bank (ASIBF: news, msgs) rallied 6.1 percent to 331 yen in heavy volume, up 19 yen.
Shares of Hitachi Ltd. (HIT: news, msgs) sank 2.3 percent to 1,015 yen and those of NEC Corp. (NIPNY: news, msgs) lost 1.6 percent to 2,110 yen.
Bellwether Sony Corp. (SNE: news, msgs) dropped 2.22 percent to 8,360 yen, while mobile phone giant NTT DoCoMo (NTDMY: news, msgs) lost half a percent to 2.13 million yen.
In currency deals, the dollar edged down, recently changing hands at 116.68 yen, against 116.85 yen in New York late Tuesday. The dollar fetched 117.22 yen late Tuesday in Tokyo.
South Korea, Taiwan, Hong Kong edge up
Like the Nikkei, South Korea's Kospi also bounced back from a lower open. It rose 0.84 percent to close at 603.83 points.
Most blue chips gained. Share of LG Electronics Inc. (LGEGF: news, msgs) gained 1.9 percent to 16,300 won. Fixed-line leader Korea Telecom (KTC: news, msgs) erased earlier gains and ended unchanged at 71,000 won, despite poor results from an auction to sell a 14.7 percent stake in the company to institutional investors.
But mobile phone operator SK Telecom (SKM: news, msgs) gave up 1.6 percent to 248,000.
Hong Kong's Hang Seng Index rose modestly higher, ending up 0.11 percent at 15,860.42 points. Most mobile phone companies climbed after the government said on Tuesday that it would issue four third-generation (3G) mobile phone licenses through a hybrid method combining a so-called beauty contest and auction. But shares of dominant telecom firm Pacific Century CyberWorks (PCW: news, msgs) shed half a percent to 4.95 Hong Kong dollars.
Leading real estate shares continued Tuesday's gains. The city's biggest developer Cheung Kong Holdings (CHEUY: news, msgs) rose 0.76 percent to 99.75 Hong Kong dollars, while number two firm Sun Hung Kai Properties (SUHJY: news, msgs) gained 1.5 percent to 83.75 Hong Kong dollars.
In Taiwan, the Weighted Index reversed course in mid-session and drifted lower, ending down 2.32 percent at 5,887.68. Leading chipmakers fell hard; among them, United Microelectronics (UMC: news, msgs) sank 5.17 percent to 55 Taiwan dollars.
New Zealand's NZ Top 40 sank 1.93 percent to 1,971.67, depressed by a 4 percent drop in market heavyweight Telecom Corp. of New Zealand (NZT: news, msgs) , which stood at 5.32 New Zealand dollars. The company will post its second-quarter results on Thursday, and analysts have been lowering their earnings forecasts in recent quarters due to the tough telecom environment.
Australia's All Ordinaries Index edged up 0.25 percent to close at 3,294.80. News Corp. shares (NWS: news, msgs) gained 3.8 percent to 19.72 Australian dollars.
But Telstra (TLS: news, msgs) slid 2.9 percent to 6.70 Australian dollars. Australia's government is pressing ahead with the full privatization of the telecom giant and will shortly consider plans to sell its remaining 50.1 percent in the company, which could fetch as much as 45 billion Australian dollars, reported the Australian Financial Review on Wednesday.
In New York overnight, major stock indexes watched their early gains evaporate, as investors didn't find remarks from Alan Greenspan reassuring. The Fed chairman's cautious optimism on the U.S. economy hinted at a less aggressive stance on the easing front going forward and sellers invaded the market late in the session. The Nasdaq fell 2.5 percent, and the Dow, 0.4 percent.
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