To: Jolie Renee who wrote (4912 ) 10/19/1998 6:53:00 AM From: Emec Respond to of 15094
Monday October 19, 6:25 am Eastern Time FOCUS-Rate cuts encourage Tokyo stocks, HK slips By Tim Johnston SINGAPORE, Oct 19 (Reuters) - Tokyo's stockmarket, still fired with the optimism sparked by last week's U.S. rate cuts, was up more than two percent on Monday, but Hong Kong ended its 2,000-point winning streak with a round of profit-taking. The Nikkei 225 average finished up 2.16 percent at 13,567.20. Traders and analysts said they were encouraged by the possibilities presented by cheaper money after the Fed rate cuts, but warned that the market was still vulnerable. ''The downside risks have lessened in the near term as global equity markets were encouraged by credit-easing around the world,'' said Koichi Kurata, portfolio manager of Ashahi Mutual Life Insurance. ''(But) if the government fails to implement an additional economic stimulus package, Tokyo stocks may retreat again.'' Hong Kong's Hang Seng dropped 177.96 points to close at 9,599.05, ending a bull run that saw the index rise over 2,000 points since October 5. But traders said the U.S. rate cuts had eased pressure on the Hong Kong dollar and some bargain hunters were looking to red chips, which they judged to have lagged behind the rally. The red-chip China-Affiliated Corporations Index was up 8.63 percent. Korean markets were depressed by the news that Hyundai Motor had won the bidding match for troubled Kia Motors, beating Ford and dashing hopes that the U.S. motor giant would funnel much needed foreign capital and confidence into Korea. The Korea composite Stock Price Index closed down 2.48 percent at 373.97. ''The choice of Hyundai, rather than Ford, was disappointing because it is likely to throw a wet blanket on efforts to lure foreign capital,'' said Sohn Byung-oh, a fund manager at Daehan Investment Trust Co Ltd. Elsewhere in Asia, Manila's traders put their money on further U.S. rate cuts and, further encouraged by a buoyant peso, drove the market up 3.62 percent to a 2- month high. ''The market was mainly affected by the general positive mood in the region (due) to prospects of another U.S. rate cut,'' said Michael Ordinanza, analyst at PCIB Securities. Taiwan ended virtually unchanged, up just 0.05 percent at 6,904.56. Brokers said the index was unable to break through strong psychological resistance at 7,000 in the absence of any clearly positive news to break the listless mood. Thailand's SET was down 5.05 points at 314.77, another victim of profit taking. The Bangkok index had risen almost 30 percent between October 5 and last Friday. Singapore, Malaysia and India's markets were closed on Monday for the Diwali holiday.