smartmoney.com
(Dow Jones)-Tokyo stocks closed slightly higher Thursday, as improved investor sentiment stemming from Wednesday's solid gains in New York offset persistent concern over the outlook for the Japanese economy. The dollar was firm in late Asian trading. Meanwhile, Hong Kong stocks continue to slide.
In Tokyo, the blue-chip Nikkei 225 index rose 3.05 points, or 0.02%, to close at 15382.02 after eight straight declining sessions - the Nikkei's longest losing streak since November 1991. Wednesday, the blue-chip index dipped 28.02 points. The index shed 1000 points, or 6%, during its losing streak.
While trading was bolstered by gains in U.S. blue chips, investor sentiment remained bearish on worries about government efforts to rescue Japan's moribund economy and deal with the banking industry's huge bad-debt problem. There is uncertainty about whether the ruling Liberal Democratic Party will be able to win support in parliament for its banking-reform bills, with the opposition parties considering their own bills, said Masaaki Higashida of Nomura Securities.
Wednesday on Wall Street, stocks ended solidly higher. The Dow Jones Industrial Average rose 90.11, or 1.06%, to end at 8552.96.
In Asia, the dollar was quoted at 147.01 yen, up from 146.29 yen late Wednesday in New York. It also was quoted at 1.7980 marks, up from 1.7859 marks in New York.
The U.S. currency's strength against the yen came after it gained ground against the German mark Wednesday in New York trading amid investor concern about a possible devaluation of the Russian ruble.
Yukihiko Hashimoto, senior foreign exchange manager at Sanwa Bank Ltd. in Tokyo, said the currency market was "very nervous about Russia."
In Russia, the stock market's main index lost 1.6% Wednesday, following a 9% plunge on Tuesday, and the Russian ruble sank against the dollar.
Traders shrugged off hints from the Japanese Finance Ministry's vice minister for international affairs, Eisuke Sakakibara, that Japan would intervene to prop up the yen, noting the slight prospects for a rapid recovery in Japanese economic fundamentals.
In Hong Kong, worries over the yen and a sell-off of heavyweight HSBC Holdings PLC weighed down the market at midday. The blue-chip Hang Seng index was down 274.24 points, or 4%, at 6585.24. Wednesday, it gained 79.53 points, or 1.2%.bw
Wednesday, the gains in New York failed to help equities in Mexico and Brazil, which continued to be weighed down by emerging-market worries. In Mexico, the IPC dropped 66.95, or 1.84%, to end at 3561.50, and in Brazil, the Bovespa plunged 384, or 4.36%, to 8417. Both indices have closed lower for nine consecutive sessions.
In Russia, Moscow stocks gave up early, modest gains to finish moderately lower after falling so sharply Tuesday that officials had to suspend trading for part of the day. The RTS index closed down 1.71 points, or 1.6%, at 108.19 following losses of about 9% in each of the previous two sessions this week.
Traders said stocks opened sharply higher in Moscow, but ran into profit-taking almost immediately. Dmitry Kryukov, trader at MFK Renaissance brokerage in Moscow, said investors were spooked by rumors of large Russian commercial banks unable to meet margin calls in the sinking Eurobond market Tuesday.
Meanwhile, embattled Russian treasury issues rose slightly after a tumble on Tuesday saw their yields soar to nearly 150%. And there was panic in the foreign-exchange market when the central bank pared back its expensive interventions to support the ruble. The currency traded below its declared range of trading for most of the day.
Traders said Russian and foreign banks were selling ruble on the view that Russia can't avoid a devaluation, even with the massive aid package promised by the International Monetary Fund last month.
In Europe, London stocks ended higher as all major markets rebounded strongly from Tuesday's massive sell-off, although traders called the buying technical in nature. Stocks in the United Kingdom overcame lingering interest-rate concerns as investors belatedly turned their attention to Tuesday's merger announcement between British Petroleum and Amoco.
Continued concerns about Asia initially weighed on the London market but a positive opening on Wall Street gave investors the confidence to buy back into the U.K. market, even if the buying was half-hearted. The FT-SE 100 index closed up 29.4 points, or 0.5%, at 5462.2. Still, the rebound falls far short of making up for the nearly 155-point drop in the FT-SE 100 on Tuesday.
In Paris, the CAC 40 index rose 99.72, or 2.6%, to close at 3945.70, while Frankfurt's DAX added 133.97 points, or 2.5%, to end at 5402.37. Those indexes fell 2.4% and 3.8%, respectively, on Tuesday. Frankfurt's Xetra DAX electronic index settled up 101.16 points, or 1.9%, at 5386.94, as investors welcomed the opportunity to bargain-hunt after the huge losses incurred this week.
Elsewhere in Europe Wednesday, Amsterdam's AEX index closed up 2.2%, the Milan Mibtel index advanced 1.4%, the Stockholm General gained 1.2%, and Zurich's Swiss Market Index rebounded 2.1%. |
