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Trading slows ahead of holiday break

Japanese share prices rallied Friday on optimism about the world's economy but gains on the bourses across the rest of the region were less impressive ahead of holidays.

Next week's Lunar New Year holidays slowed stock market trading in the Asia-Pacific, although buying in bluechips on the bigger exchanges helped most end in positive territory.

Japanese share prices are likely to recover from dips and edge up in the coming week with US corporate earnings expected to shore up the market, brokers said on Friday.

"In the absence of major economic data, the market will be watching earnings reports by US companies" for the December quarter, said Kazunori Jinnai, head of equities at Daiwa Securities SMBC.

"US companies which have announced upbeat reports but have not been bought will draw buyers as did IBM," which in turn should support Japanese firms in the same sectors, he said.

The benchmark Nikkei-225 index is likely to climb toward the 11,000 mark unless the US market plunges, Jinnai said, adding the Tokyo bourse has been lagging behind other major markets.

In the holiday-shortened week just ended, the Nikkei lost 107.85 points or 0.98 percent to 10,857.20.

The broader Topix index of all first-section shares slipped 6.81 points or 0.64 percent to 1,058.97 on the week.

Daily trading volume averaged 1.43 billion shares worth Y1.14 trillion (US$10.7 billion).

Masaaki Higashida, senior market analyst at Nomura Securities, also forecast in a report that "the Nikkei average may rise above 11,000 if solid earnings of US companies are confirmed to fuel optimism over Japanese corporate results."

He said he expects the index to move between 10,400 and 11,200 in the coming week.

Singapore share prices are forecast to ease this week as investors take a breather ahead of the Lunar New Year holidays, dealers said on Friday.

The Straits Times Index finished the week at 1,836.87 on Friday, down 15.66 points or 0.85 percent from the previous week.

Hong Kong share prices are likely to be pegged in a narrow range this week as fund managers lock in recent gains ahead of the holiday break, dealers in the territory said on Friday.

For the week, the Hang Seng Index fell 218.04 points or 1.63 percent to close at 13,167.76 on Friday, led down by profit taking in market leader HSBC.

Peter Lai, director at OCBC securities, said the market will likely pull back next week as investors opt to take profits but it should hold in a range.

"The market will see some correction as it has risen some 400 points since January 1 and property stocks will be under a bit of selling pressure," Lai said.

The Kuala Lumpur Stock Exchange composite index lost 8.15 points, or 1 percent, in the past week to close Friday at 817.27 points.

Victor Wan, senior analyst with Mercury Securities, noted a new year rally failed to materialize and the market consolidated as investors took profit from recent gains. This has brought the market valuation back to reasonable levels, he said.

In Australia, the benchmark SP/ASX 200 ended the week down 12.9 points or 0.4 percent on 3,288.8 points, while the All Ordinaries was up 1.4 points to 3,298.1.

The market will be dominated by the performance of resources stocks in the week ahead and by what leads are generated by the results season in the US, dealers said on Friday.

"Obviously the resources sector is going to be a major driver of the market this year and I would expect the recent focus on the sector to continue, even though we have seen stocks come off a bit over the last week or so," said Shaw Stockbroking analyst Jamie Spiteri.

Foreign investors continued to buy into electronics, financials and chemicals in Seoul on Friday, helping the market avoid a heavy correction after a recent run-up.

The composite index edged up to 847.95 on Friday. Over the week, the index rose 0.1 percent.
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