Sun, Nov 14, 2004 - Page 10 News List

Asia undaunted by bad news from Japan

POSITIVE SPIN Share prices soared on Friday as investors decided to ignore weaker-than-expected growth figures in Japan and focus on improving consumer demand


Asian stock markets closed sharply higher on Friday and on a very positive note as lower oil prices and another strong performance on Wall Street encouraged investors to look past much weaker-than-expected Japan-ese growth data, dealers said.

Japan reported what should have been bad news -- third quarter growth well short of expectations as capital expenditure and exports slowed -- but instead investors focused on continued strong consumer demand.

After an initial sell-off on the news in both stocks and the yen, Tokyo steadied and then rose to post a sharp gain of 1.6 percent on the view that the economy had probably just got through a soft spot, in line with the US, and now seemed set for a further pick up.

At the same time, dealers said the market believed that consumer demand could improve further and this should help take up any slack from slower capital expenditure and exports.

The positive spin was certainly welcomed elsewhere, as in Seoul which put on 1.79 percent, with the tone increasingly positive in light of lower oil prices and renewed optimism on Wall Street, especially on the tech sector.

Dealers were largely agreed that next week should see more of the same.

Taiwanese share prices closed 0.73 percent higher, recovering some of the ground lost on Thursday as financials and electronics led the way following Wall Street's overnight gains, dealers said.

The TAIEX closed up 42.64 points at 5,917.16, off a high of 5,952.45, on turnover of NT$67.74 billion (US$2.07 billion).

Gainers led decliners 364 to 216, with 200 stocks unchanged.

"Wall Street set the tone and the local bourse followed suit," said Eric Lai, a fund manager at Fidelity Securities Investment Trust Fund.

"Sentiment was also bolstered by expectations of foreign fund inflows in the run-up to Morgan Stanley Capital International's scheduled increase of Taiwan's weighting [later this month]," he said.

While the electronics sector got support from the strong showing of US technology stocks, financials were pushed higher by renewed merger hopes.

Japanese share prices closed 1.60 percent higher as investors focused on strong consumption figures in what was otherwise much weaker-than-expected third-quarter growth data, dealers said.

The Tokyo Stock Exchange's benchmark NIKKEI-225 index gained 173.06 points to 11,019.98. The broader TOPIX index of all First Section shares rose 12.89 points or 1.18 percent to 1,104.02.

South Korean share prices closed 1.79 percent higher, with sentiment underpinned by NASDAQ's rally, falling oil prices and the government's planned economic stimulus package, dealers said.

The KOSPI index closed up 15.41 points at 876.67, off a high of 882.59.

Hong Kong share prices closed 1.17 percent higher on continuing institutional interest in HSBC, dealers said. The Hang Seng Index closed up 159.95 points at 13,784.46.

Chinese share prices closed 0.38 percent higher as petrochemical stocks benefited from lower oil prices while power companies found favour again, dealers said.

The Shanghai A-share Index rose 5.43 points to 1,419.46, while the Shenzhen A-share Index was up 0.65 points or 0.18 percent at 356.50.

The benchmark Shanghai Composite Index, which covers both A- and B-shares, closed up 5.15 points or 0.38 percent at 1,352.22 on turnover of 9.49 billion yuan.

Australian share prices closed unchanged as investors moved to lock in profits from the market's recent record-breaking run, dealers said.

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