Weaker the dollar ,,stronger the gold ..
Asia went nuts,,
China Shanghai Composite ^SSEC 3:01AM 1178.375 +14.848 +1.28% Chart
Hong Kong Hang Seng ^HSI 4:00AM 8076.76 +588.29 +7.86% Chart , News
Japan Nikkei 225 ^N225 2:04AM 14790.06 +747.15 +5.32% Chart
Europe rallying ..
France CAC 40 ^FCHI 9:45AM 3694.57 +3.82 +0.10% Chart
Germany DAX ^GDAX 9:46AM 4927.67 +107.42 +2.23% Chart
Greece General Share ^ATG 6:30AM 2126.87 +30.49 +1.45% Chart
Hungary BUX ^BUX 7:16AM 4948.83 +57.18 +1.17% Chart
Russia Moscow Times ^MTMS Sep 4 286.37 +23.02 +8.74% Chart
United Kingdom FTSE 100 ^FTSE 9:41AM 5308.10 +141.10 +2.73% N/A
Stocks: Close Sharply Up On Public, Hedge Fund Buying
TOKYO (Dow Jones)-The Nikkei stock average surged almost 750 points Monday, the second biggest point gain this year, as a more bullish environment for stocks prompted hedge funds and public funds to actively buy futures.
The yen's sharp gains against the dollar, what the market interpreted as hints from Federal Reserve Chairman Alan Greenspan that the Fed might lower interest rates, the rebound in S&P U.S. stock futures during Asian trading hours and stronger Asian shares all contributed to the rally in Tokyo stocks, traders said.
"Stocks have a very good chance of rising further ahead of the Friday settlement for September futures," said Masaaki Higashida, deputy general manager of the investment information department at Nomura Securities.
Still, traders say many investors remain cautious amid uncertainty about the weak Japanese economy and with corporate earnings expected to deteriorate further.
The Nikkei average of 225 selected issues rose 747.15 points, or 5.3%, Monday to 14,790.06 after a fall of 218.33 points on Friday. This was the highest close since Aug. 26 - when the Nikkei ended at 14,866.03 - and the biggest point gain since Jan. 16 - when the Nikkei rose 924.47 points to 16,046.45.
Buying that originated in the futures market spilled over into the cash market, traders said. Position adjustment before the Friday settlement of September futures was a factor in Monday's buying.
Market participants also said hedge funds seeking to cover losses suffered in Russia drove up the futures market. Public funds were also widely rumored to have stepped in to buy futures when the Nikkei average dropped below 14,000 in early morning trade.
Traders say a rise in the futures market created an opportunity for some to sell futures in order to buy back short arbitrage cash positions. Investors need to return borrowed shares before the Sept. 30 close of the fiscal half.
As a sign that the cash market was influenced by the activity in futures, traders noted that investors were actively buying shares included in the Nikkei average.
The near-term September Nikkei futures contract ended up 920 points at 14,930.
A Friday speech by Greenspan was also bullish as it is likely to push New York stock prices higher. Greenspan said the Fed is no longer averse to cutting interest rates because it fears the U.S. economy is increasingly vulnerable to the global financial crisis.
After Greenspan's remarks, S&P 500 U.S. stock futures rallied in Asian screen trade, with the September contract up 19.9 points at 995.90 late in the session. In Chicago on Friday, they had dropped 9.50 points.
A rebound in stock markets across Asia, as well as the stronger yen, also supported Tokyo shares. The dollar fell below 132.00 yen Monday for the first time since May 6. A stronger yen is bullish for Tokyo stocks as it makes them more attractive to foreign investors.
In this environment, participants expect the market to hover between 14,000 to 15,300 for the remainder of the week.
The Tokyo Stock Price Index, covering all first section issues, rose 38.18 points Monday to 1,132.65.
Volume on the First Section of the Tokyo Stock Exchange was estimated at 503 million shares, up from 447.54 million shares Friday.
Advancing issues outnumbered retreaters 986 to 185, while 125 issues were unchanged. |
