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Asian markets surge on Japanese markets, yen
SINGAPORE, Sept 7 (Reuters) - Asian markets surged on Monday, with a rise in Japanese shares and the yen helping spark a seven percent leap in Hong Kong stocks and a two percent rise in Australia.
Tokyo, Seoul and Singapore exchanges rose more than two percent, while Malaysian shares, whipped about recently by new currency controls and political turmoil, rocketed more than 26 percent.
New Zealand shares fell on local factors and Taiwan and Philippines shares were mixed.
Hong Kong's Hang Seng Index shot up 486.98 points, or 6.50 percent, to 7,975.45 on a firmer yen and lower interest rates after government measures to strengthen its currency-board monetary system. By 0307 GMT it had surged to 8045.13, up 7.43 percent.
''There is still a lot of short-covering mainly due to the measures that the government took over the weekend, which seemed to be very positive,'' said David Williamson, director at Indosuez W.I. Carr.
''Basically the key thing is the interest rate environment. They are trying to keep down the volatility of interest rates and that will be very good for Hong Kong and I think that's why we have seen the (upward) movement in the market,'' Williamson added. Tokyo stocks ended a volatile morning session sharply higher on technical factors, but the market was still jittery over global financial woes and stalled financial stabilisation bills, traders said.
Some said Friday's remark by U.S. Treasury Secretary Robert Rubin, that Japan must use public funds to help banks, raised hopes for a swift decision by Japan on a fund injection for the banks, helping buying-backs in bank shares.
At midday, the benchmark Nikkei average was up 387.76 points or 2.76 percent at 14,430.67. Early losses on the Nikkei were wiped out by active buying in the futures, aiming to take short-term gains.
This sparked futures-linked buying in the cash market, traders said. Some said it may be short-covering by hedge funds.
''Since the New York stock market will be closed tonight, speculative buying appeared to jump in the market,'' said Tsuyoshi Segawa, general manager at New Japan Securities. The U.S. share markets are closed for the Labour Day holiday.
The dollar fell more than two yen from an early high to trade at 132.55 yen by mid-morning in Tokyo, traders said. Rounds of interbank-led liquidation pushed down the greenback to the low in volatile trade, they said.
At 0246 GMT, the dollar stood at 132.20/30 yen compared with 133.51/61 yen in late New York on Friday, when Federal Reserve Chairman Alan Greenspan said the U.S. central bank was now as inclined to cut interest rates as to raise them.
The Fed's previous bias towards tightening had underpinned the U.S. dollar.
In Seoul, the yen's strength helped boost buying in blue chips such as Samsung Electronics , brokers said. The Korea Stock Exchange composite index rose 8.87 points or 2.81 percent to 324.70.
The rise in Tokyo stocks combined with strong resources stocks and hopes of a U.S. interest rate cut to push the Australian share market 1.9 percent higher by midday.
By noon, the All Ordinaries index had gained 47.2 points to 2,551.2 on turnover of A$291.9 million. Soon after, the market was 2.05 percent higher at 2555.3.
''The dollar is holding quite well, Tokyo's up this morning, futures are very strong, bonds are strong and there are quite a few (takeover) rumours around,'' said dealer Peter Struk of Reynolds & Co.
In Kuala Lumpur, shares extended massive gains in early trading on buying by local funds and retail players, dealers said.
At 0335 GMT, the benchmark 100-stock Composite Index was up 95.18 points, or 26.19 percent, to 458.62.
''Local funds are under instruction to push up the market,'' said a senior analyst at a local brokerage.
Singapore shares were firm in early trading with blue chips helping the key Straits Times Index to rise 2.48 percent, or 19.95 points, to 824.99 at 0256 GMT.
But dealers said they were not paying much attention to the market as they were swamped by calls from clients anxious over the holdings of Malaysian shares traded over the counter (OTC).
Local broking houses also said many clients were already at their doors, wanting to know what to do with their shares. New Zealand shares fell two percent at the open, a fall accentuated by shares going ex-dividend, brokers said. By 0300 GMT, shares had recovered to trade down just 0.63 percent.
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