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Asian stocks hit record highs as nerves subside

Market movements * Taipei: TAIEX up 1.43 percent or 85.80 points to 6,106.74 * Tokyo: NIKKEI-225 up 211.33 points or 1.47 percent to 14,623.12 * Seoul: KOSPI up 0.23 percent or 2.9 points to 1,272.25 * Hong Kong: Hang Seng up 95.34 points to 14,883.32 * Shanghai: Shanghai Composite up 21.69 points or 1.98 percent to 1,117.0 Source: AFP

Asian stocks on Friday closed sharply higher with markets nearing or breaking records as investor nerves over inflation and increased interest rates eased further, dealers said.

They said there was a growing confidence that oil prices will be contained which added to the positive tone while the recent sustained recovery on Wall Street suggests further ground is to be made.

At the same time, more gains in Tokyo, up 1.74 percent to a near five year high, provided another strong lead for the regional markets to follow.

The markets have now fully recovered from last month's setback. Dealers said the much talked-about year-end rally appears to be well underway and this was highlighted by a 1.43 percent rise in Taipei, a 2.10 percent spike in Jakarta, a 1.4 percent gain in Singapore, Manila's 1.16 percent improvement and Sydney's 0.91 percent rise.

In Taipei share prices closed 1.43 percent higher, with sentiment boosted by Wall Street's firmer performance overnight and continued foreign interest in local stocks.

Dealers said a strong showing by the regional markets also helped, especially in Tokyo where stocks continued to power ahead.

The upbeat GDP forecast data for the nation encouraged investors to buy stocks, they said.

The Directorate General of Budget, Accounting and Statistics said on Thursday afternoon that GDP rose 4.38 percent year-on-year in the third quarter to September compared with the 4.32 percent growth forecast by the government in August.

While technology stocks outperformed the broader market on the back of a strong showing by the NASDAQ, financial stocks attracted interest following the government's decision to approve the merger of state-run Bank of Taiwan (台灣銀行) with Central Trust of China (中央信託局).

According to Kai Yuan Securities Investment Consultant Co (開元投顧) president Tom Tang (湯建源), investors were eager to build portfolios following the market's recent correction.

"Riding on the rally on the NASDAQ, technology stocks posted gains and led the broader market much higher," Tang said.

The TAIEX rose 85.80 points to 6,106.74 on turnover of NT$117.80 billion (US$3.51 billion).

Tokyo share prices rose to a near five-year high on confidence in the economic outlook, regaining levels last seen before Japanese Prime Minister Junichiro Koizumi took office.

Dealers said shares were bolstered by US gains after the technology-rich NASDAQ index powered ahead to reach mid-2001 heights in New York overnight.

The NIKKEI-225 index rose 211.33 points or 1.47 percent to 14,623.12, the highest closing level since Dec. 14, 2000.

"Shares surged on the bullish tone on Wall Street overnight, particularly the NASDAQ which settled at its highest level in more than four years," said Seichi Suzuki, a market analyst at Tokai Tokyo Securities.

The NIKKEI blue-chip marker earlier broke through levels last seen soon after Koizumi took office in April 2001, sparking a brief victory rally above 14,500 points on hopes of economic reform.

In Seoul share prices closed 0.23 percent higher, with sentiment underpinned by Wall Street's overnight rise. The KOSPI index closed up 2.9 points at 1,272.25.

In Hong Kong share prices closed 0.64 percent higher on easing concerns over the outlook for interest rates and hopes that US President George W. Bush's weekend visit to China will help calm trade frictions.

The Hang Seng Index was up 95.34 points at 14,883.32. The property sub-index closed up 177.67 points or 1.02 percent at 17,603.35.

Shanghai share prices closed sharply higher, adding 1.98 percent on fresh fund inflows with heavyweight steelmakers and oil refiners snapped up.

Dealers said new cash, or at least the prospect of it, coming from increased quotas for Qualified Foreign Institutional Investors (QFII) was the theme taken up, with many expecting the government to continue its supportive stance for the markets.

The Shanghai A-share Index added 22.76 points to 1,174.08, while the Shenzhen A-share Index was up 6.57 points or 2.38 percent at 282.25. The benchmark Shanghai Composite Index, which covers both A- and B-shares, added 21.69 points or 1.98 percent at 1,117.0.

China's foreign exchange regulator has agreed to boost total QFII quotas from US$6 billion to US$10 billion this year and some foreign houses have recently been given larger fund allocations.

In Sydney share prices closed just off record highs as investors bought resources stocks following further gains in metal prices, especially gold. The S$P/ASX 200 index ended the day up 42.0 points or 0.91 percent at 4,671.1 and was just below the all-time high of 4,671.7 set on Sept. 29.

Singapore share prices closed 1.4 percent higher, boosted by the economy's strong showing in the third quarter with sentiment also buoyed by hefty gains elsewhere in the region. The Straits Times Index gained 31.71 points to 2,293.2.

Malaysian share prices closed 0.83 percent higher on year-end window-dressing by local funds amid strong gains on regional markets and following an improved Wall Street. The Composite Index gained 7.42 points to 901.72.

In Bangkok share prices closed 0.56 percent higher on a technical rebound following selling triggered by the suspension of utility giant EGAT's public listing. The Composite Index rose 3.78 points to 676.41, marking the first increase since Nov. 90.

In Wellington share prices closed flat, ignoring news that the country has won the right to host the 2011 Rugby World Cup which should pump hundreds of millions of dollars into the local economy. The NZSX-50 gross index gained 1.4 points to 3,326.03.

In Mumbai share prices rose for a sixth consecutive day, closing up 0.43 percent, led by fund-based buying by overseas and domestic funds and retail investors.

The SENSEX index rose 37.13 points to 8,686.65.
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