Hong Kong, Japan, Thailand
Rally Despite Nasdaq Losses
A WSJ.com News Roundup
Asian-Pacific markets largely ignored the continued blood-letting on Wall Street with strong rallies in Hong Kong, Japan and Thailand. Indonesian shares rose despite continued ethnic violence.
The Nasdaq Composite Index fell 1% to 2244.96 Thursday, its lowest closing level in more than two years. The Nasdaq is down nearly 56% from its March 2000 high. The Dow Jones Industrial Average, however, managed a minuscule gain for the day, rising 0.23 to 10526.81 and is down a relatively tame 10% from its high.
Hong Kong shares rebounded from a two-day selloff, shrugging off a dismal performance by the Nasdaq Thursday. Investors stampeded into red-chip shares and Class H shares on hopes that China's Class B-share markets would jump when trading resumes Monday. Red chips are Hong Kong-listed China-backed companies while Class H shares are state-owned enterprises listed in Hong Kong. Shenyin Wanguo , which has a brokerage license in China, surged 32% to 99 Hong Kong cents, after a 72% jump over past week.
Richard Li's telecommunications and Internet firm Pacific Century CyberWorks added 4% to 4.55 Hong Kong dollars, on news that Hutchison Whampoa , which headed by his father Li Ka-shing, will take a small stake in CyberWorks . Hutchison said it will sell 100% of its satellite communications business for HK$803.4 million, in exchange for CyberWorks' new shares. Hutchison, the most heavily traded stock of the day, fell 1.1% to HK$90.75. Cheung Kong Holdings , which has a 49.9% stake in Hutchison, shed 1.31% to end at HK$94.
Worries that Cable & Wireless PLC may dispose of half of its 15.3% CyberWorks stake, after a share lock-up agreement expired, cast a shadow over CyberWorks shares. They've fallen more than 80% from a high of HK$27.86 in mid-February 2000.
China's yuan-denominated Class A shares closed higher, lifted by last-minute buying in companies that list both Class A and Class B shares. Trading in foreign-currency denominated Class B shares remains suspended, pending the formal entry of domestic Chinese investors into the market, which to date has been technically reserved for foreign investors. Trading is expected to resume Monday.
Indonesian shares ended higher on a rebound in cigarette stocks, but gains were capped by reports of violence on the Indonesian part of Borneo island. Violence between indigenous Dayak people and immigrants from Madura island erupted in Sampit and surrounding districts on Sunday. Dayak gangs armed with machetes and daggers have paraded the severed heads of Madurese victims around the town. The slaughter came as the World Bank warned that Indonesia could be headed for an economic collapse unless the government ends the rampant violence and restores political stability.
Thai stocks jumped in heavy trading after the Finance Minister agreed to consider a plan to bolster the equity market. The banking sector jumped 9.1% and finance sector added 13.9% on hopes of a clearer picture of the planned national asset management corporation after the government and bankers discuss the issue this weekend. National Finance jumped 13.8% to 9.10 baht, Thai Military Bank added 14.1% to 8.90 baht and Bangkok Bank rose 8.7% to 40.75 baht.
Japan's shares rallied on broad-based bargain hunting, unaffected by Standard & Poor's downgrade of Japan's sovereign credit rating. Rising hopes for more stock-price supportive steps by the government and the central bank lifted shares.
NKK and Hitachi Zosen 's shares ended sharply higher after the company's announced that they have agreed to integrate their shipbuilding operations. NKK added 9.5% to 92 yen and Hitachi Zosen gained 4.5% to 93 yen.
Bridgestone 's shares rallied 2.5% to 984 yen after six straight sessions of losses, following the company's announcement Thursday it would keep intact an earlier 2001 group earnings estimate .
Mitsubishi Motors ' shares shed 0.6% to 349 yen, almost unmoved by reports that the troubled auto maker will close its Nagoya passenger car factory and cut more than 10% of its 65,000-strong group work force.
Bargain hunting lifted Philippine shares, after four straight days of declines. Traders said an undercurrent of bad news -- a depreciating peso, renewed political uncertainty, and a slew of poor corporate earnings -- weighed on the market, capping the rebound.
Philippine National Bank 's shares jumped 11%, or 4 Philippine pesos to 40 pesos on reports that the government and business tycoon Lucio Tan are planning to jointly sell their controlling interest in the bank. Finance Secretary Alberto Romulo denied that the government already has a sale plan, but the denial came after the market closed.
Australia's shares closed flat as gains in most bank stocks offset losses in Brambles Industries and Qantas Airways after both companies reported poor interim earnings Thursday. Qantas's shares fell 5%, or 17 Australian cents, to 3.25 Australian dollars on the 22% fall in interim net profit. Brambles' shares lost 7.4%, or A$3.50 to A$44 on an 82.2% slide in interim net profit and delays in detailing merger plans with the U.K.'s GKN .
Ordinary shares in News Corp. fell 2.2%, or 40 cents, to A$17.80 following a capital raising earlier in the week. The company's American depositary receipts lost 2.2% Thursday. The capital raising has hurt the share price because certain funds that have subscribed to the capital raising have hedged against their increased exposure to News Corp. by lowering equity holdings.
South Korean shares ended flat amid a tug of war between local buying and foreign investor selling. Bargain hunting lifted telecommunications-related blue-chip stocks after recent sharp losses, with SK Telecom rising 7,500 won to 212,500 won and Korea Telecom adding 1,300 won to 67,300 won.
Malaysian and Singapore shares closed mixed. In Malaysia, bargain hunting offset continued selling of banking stocks , with most investors staying on the sidelines awaiting the release of company earnings. Banker Commerce Asset shed 11%, or 1 ringgit to 8 ringgit. In Singapore, select blue chips and property stocks made modest gains in quiet trading.
A third straight session of losses hit Taiwan shares following Nasdaq's continued blood letting.
Indian shares fell sharply after the government's annual Economic Survey projected dismal growth and recommended that government cut support to local industry.
"The fall was mainly due to speculative selling ahead of the budget as today was last day of BSE settlement. Sentiment also turned weak following the disappointing growth outlook projected by the Economic Survey," said Sajit Pisharodi, chief dealer at IDBI Capital Market Services.
In dollar terms, at around 6 a.m. EST, the Asian-Pacific sector of the Dow Jones Global Indexes added 1.08, or 1.19%, to 91.86, after losing 0.55 in the previous session. The Dow Jones World Stock Index added 0.31 to 198.50 after sliding 1 in the previous session.
Consumer-electronics and steel shares led the Dow Jones Global Industry Groups, while pharmaceutical and major oil company stocks were among the laggers.
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