Sun, Nov 20, 2005 - Page 10 News List

Asian stocks hit record highs as nerves subside

SHARP RISE In Taipei share prices closed firmer as an upbeat GDP forecast encouraged investors to buy stocks amidst a strong showing by regional markets


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).

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

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.

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