Asia Markets
Asia markets rebound; Nikkei up 1.9%
Seoul, Sydney also up despite Wall Street's tumble
By Mariko Ando, CBS.MarketWatch.com
Last Update: 5:06 AM ET Sep 18, 2001
TOKYO (CBS.MW) - Tokyo's Nikkei gained nearly 2 percent Tuesday as investors placed bets that the Bank of Japan will join global central banks in loosening monetary policy as a way to get the economy moving again.
Other markets rebounded as well in Asia. South Korea topped gainers with a 3.5 percent rise, while Australia and New Zealand also climbed. But Hong Kong erased earlier gains to trade flat by late afternoon.
In Japan, the Nikkei Average jumped 1.85 percent, or 175.47 points, to close at 9,679.88, rebounding from Monday's plunge of 5 percent to an 18-year low.
The index at one stage rallied over 4 percent but news in the mid-afternoon that several foreign brokerages and some major hotels in Tokyo's central business area had received bomb threats pared gains. The incident appears to be a hoax in copycat incidents after the U.S. terrorist bombings.
The broader TOPIX rose 1.67 percent to 1,013.09.
Meanwhile, investors welcomed rate cuts by the Fed and the European Central Bank.
"Joint credit easing by the U.S. and Europe reassured investors because the moves highlight how serious international monetary authorities are about helping to boost the global markets. Now Japan has to follow suit as soon as possible; tomorrow will be too late," said Masatoshi Sato, senior strategist at Mizuho Investors Securities.
The Bank of Japan started its two-day policy-board meeting earlier in the day. A further easing of its already ultra-loose monetary policy is widely expected.
Sato said Tokyo stocks will be able to extend gains despite U.S. volatility if the BOJ announces "appropriate action."
U.S. stock markets resumed trading on Monday, after being closed nearly a week after terror attacks pulverized the World Trade Center and damaged Pentagon last Tuesday. See full story. A decision by the Fed to cut interest rates by a half percentage point to 3 percent didn't do much for Wall Street, where both the Dow and Nasdaq plunged around 7 percent. The ECB also unexpectedly cut rates by a half point.
Analysts said Wall Street's tumble was to be expected as markets opened up for the first time after the U.S. terrorist attacks.
Sato added: "Tokyo stocks' mid to long term outlook is still very murky given the corporate profit outlook and ongoing weakness in the economy. The terrorist attacks have also poured fuel into the global slowdown in the economy...but the Nikkei has reached a level where a technical rebound can be seen following massive sell-offs since last week."
Despite the yen's firmer trend against the dollars, some exporters gained ground after being heavily sold in recent sessions.
The dollar was quoted at 117.75 yen by mid afternoon Tokyo, against 117.72 yen in late New York. Still, the dollar has fallen about 3 percent against the yen since the start of this month.
NEC (NIPNY) (6701) gained 1.8 percent to 1,165 yen. Sony (SNE) (6758) added 1.2 percent to 4,260 yen. Hitachi (HIT) (6501) closed up 1.9 percent to 803 yen.
But Toyota Motor (TM) (7203) erased earlier gains to close down 0.3 percent at 3,180 yen. Honda (HMC) (7267) lost 2.1 percent to 3,770 after having risen over 2.5 percent earlier in the day.
Japan Airlines (JAPNY) (9201) rose 3.2 percent to 290 yen. Shares had plunged over 14 percent since Tuesday's attacks as investors feared an expected slowdown in air travel would hurt the company's business. All Nippon Airways (ALNPF) (9202) ended flat at 292 yen, after diving 14 percent yesterday.
Seoul jumps 3.5%; HK flat; Taiwan remains shut
In South Korea, the benchmark Kospi jumped 3.45 percent to 484.93, rebounding from Monday's 2.5 percent drop. Investors were pinning their hopes on prospects for lower interest rates and government support measures for the equity market. See full story.
Technology and telecom shares led gainers. Samsung Electronics rose 2.1 percent to 167,500 won. SK Telecom (SKM) added 0.2 percent to 211,500 won. Kookmin Bank (KKBKY), the country's biggest commercial lender, saw its shares rise 1.2 percent to 17,450 won.
Hong Kong's Hang Seng Index was trading at 9,325.70 points by late afternoon, up only 0.07 percent.
China Mobile (CHL) (0941), the mainland's largest mobile phone company, jumped 2.8 percent to 22.30 Hong Kong dollars, while rival China Unicom (CHU) (0762), China's No. 2 phone company, stood flat at HK$7.60.
HSBC Holdings (HBC) (0005), Hong Kong and Europe's largest bank, rose 0.3 percent to HK$75.50.
Taiwan's financial markets remained closed as a powerful typhoon continued to stay near the island. A powerful typhoon has killed at least 25 and left 6 missing in Taiwan as record rainfall triggered mudslides and massive flooding on the northern part of the island, according to a local media report.
On Friday, the benchmark Weighted Index tumbled 4.5 percent to 3,774.62, making the week's loss at 12 percent.
Australia, New Zealand also higher
Australia's All Ordinaries Index rose 1.83 percent to close at 2,948.50. It slid 4.78 percent Monday.
Banks also rose. Shares of National Australia Bank (NAB) climbed 2 percent to 25.91 Australian dollars, while those of Commonwealth Bank of Australia (CBAZF) added 2.3 percent to A$27.
New Zealand's NZ Top 40 rose 2.23 percent to close at 1,830.23. Investors scooped up bargains after heavy selling in broad-based sectors slashed the index by 4.6 percent the previous day.
Air New Zealand's unrestricted B shares (ANZBF) surged 13.3 percent to 34 cents. On Monday, shares crumbled 40 percent to an all-time low at 30 cents, hit by worsening concerns over the financial status of the nation's leading airline.
Elsewhere in the region, Singapore's Straits Times Index lost 0.65 percent to 1,325.77, while Malaysia's KLSE Composite fell 0.65 percent to 605.06 by early afternoon.
India rebounds from 8-year low, Pakistan closed
In India, the benchmark BSE 30 tumbled gained 1.68 percent to 2,726.10 by late afternoon. The benchmark on Monday closed down 5.27 percent at a near 8-year low at 2,680.98 on rising tension in the region ahead of expected retaliatory attacks by the U.S. on Afghanistan. See full story.Pakistan's stock markets will be closed until Wednesday. The suspension period might be extended if the situation did not improve on international and national fronts, said local media reports.
Pakistan effectively closed its borders on Monday as tens of thousands of Afghans streamed toward the frontier, sparking fears of a mass exodus, said the reports.
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