Asian financial markets rally, led by Japan gains
By Clarence Fernandez
SINGAPORE (Reuters) - Asian markets surged on Monday, with a rise in Japanese shares and the yen helping ignite a region-wide rally which took Hong Kong stocks eight percent higher and Australian shares up two percent.
Malaysian shares, whipped about recently by new currency controls and political turmoil, rocketed more than 22 percent, while Tokyo spurted five percent and Seoul jumped four percent.
Singapore stocks closed seven percent up and Bangkok shares ended six percent higher.
Hong Kong stocks finished 7.86 percent higher at 8.076.76 points on short-covering triggered by a firmer yen and lower interest rates after the government moved to boost liquidity in the banking system, brokers said.
The Hang Seng index had earlier soared 700.96 points to a day's high of 8,189.43 points.
''The stock market performance today has been related to interest rates coming down and also short-covering,'' said Steven Thompson, chief analyst at Nikko Research Center (HK). ''Anyone out there who is short was surprised by these measures and fled the market.''
Tokyo's benchmark Nikkei average posted its second-largest point rise this year, jumping 747.15 points or 5.32 percent to 14,790.06.
Traders said public and corporate pension funds poured money into the futures market to cover short positions ahead of Friday's expiration of index options and futures.
''What we saw was a re-emergence of the 'buy Japan' scenario,'' said Martin Foster, a senior analyst at Standard & Poor's MMS. ''When you got the public fund buying in the morning it just put the seal of approval on it.''
The dollar swooned against the yen by late Tokyo on sales by U.S. hedge funds and a late surge in Tokyo stocks, dealers said.
The greenback at one point fell by more than three yen from the day's high, dipping to a low near 131.60 in late Tokyo. By 0954 GMT, the dollar stood at 131.05/10, off a high of 134.67 yen in early trade.
''The currency is providing the underlying strength here,'' said Michael Wilkins, a dealer at Tokyo's Credit Lyonnais. ''It's scaring money back into Japan.''
The Australian share market jumped 2.6 percent to close at 2,569.2 points, helped by bargain-hunting in the resources sector and hopes of an easing in U.S. interest rates.
South Korean stocks closed up 3.92 percent, or 12.39 points, at 328.22 points, on the yen's strength against the dollar and futures-related trading, brokers said.
Malaysian shares closed up 22.46 percent, or 81.62 points, to 445.06, the index's largest-ever one-day percentage gain.
Local funds snapped up key blue-chip stocks, with shares of companies linked to Prime Minister Mahathir Mohamad leading the rebound, traders said.
''We were planning to write 'crony stocks to rise' last Friday because the retailers were betting like crazy,'' said Audrey Ho, head of research at Paribas Asia Equity.
Mahathir imposed strict capital controls last week, and on Monday took over the job of sacked finance minister Anwar Ibrahim, besides naming a key aide to replace the central bank chief who quit along with the deputy governor.
Thai shares were 6.39 percent up at 220.56 points by 0952 GMT, pulled up by active trade on the back of sharp regional rises -- following a week in which the market slumped to new 11-year lows every day.
Singapore shares rode on the back of futures trading, improved regional currencies and a possible transfer of portfolios, to close up 7.09 percent or 57.06 points at 862.10, off an intraday high of 875.60.
Manila shares closed 2.38 percent up at 1186.93, and Jakarta stocks ended 3.15 percent higher at 335.81 points.
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If overseas markets are any indication we will be headed higher tomorrow.
Regards, Jeff
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