Sun, Jun 04, 2006 - Page 10 News List

Asian stocks shoot higher as inflation fears subside

REGIONAL MARKETS The TAIEX added 86.8 points on Friday, with investors egged on by a `convergence of positive leads at home and abroad,' one analyst said


Traders work during morning trading at the Hong Kong Exchanges on the first trading of Bank of China on Thursday. Investors were snapping up shares in Bank of China in early trading on Thursday as the lender's initial public offering, the world's biggest in six years, hit the market in Hong Kong. Shortly after trading began, the stock's price was at HK$3.15 (US$0.40), 6.8 percent higher than its IPO price of HK$2.95.


Asian stocks closed sharply higher on Friday with investors cheering a rally on Wall Street where the latest economic data appeared to show solid economic growth with inflation mostly in check.

Mumbai led gains with a 3.7 percent surge while Jakarta followed with a near 2 percent rise. Taipei, Tokyo, Seoul, Hong Kong, Singapore and Bangkok all put on more than 1 percent.

However, dealers said not all the anxiety had abated from the market in the wake of last month's rout and many investors were in the sidelines awaiting further signs from the US on the state of its economy and the prospects for interest rates.

This was particularly the case in Kuala Lumpur, which closed flat, and in Shanghai and Manila where investors bucked the trend resulting in modest losses.

Investors were expected to focus on the release of US non-farm payrolls late on Friday for their next lead.

In Taipei share prices closed 1.26 percent higher following overnight gains on Wall Street and hopes for some easing in Taiwan's policies on China.

Dealers said investors were cheered by reports that the Mainland Affairs Council expects concrete progress on the issue of regular cross-strait charter flights in four to five months and that more Chinese tourists may be allowed to visit Taiwan from Oct. 1.

The TAIEX added 86.80 points at 6,959.64 on turnover of NT$95.18 billion (US$2.97 billion).

"A timely convergence of positive leads at home and abroad contributed to today's bull run," SinoPac Securities Corp (建華證券) assistant vice president Alvin Teng (鄧可欣) said.

Apart from the Wall Street lead, investors were encouraged by growing signals that the government is getting serious about improving links with China, he said, noting President Chen Shui-bian's (陳水扁) decision to hand over some powers to the Cabinet.

Tokyo share prices ended a rollercoaster week on an upbeat note after a late flurry of buying lifted the benchmark NIKKEI index up 1.84 percent ahead of key US jobs data.

Dealers said shares had swung in and out of positive territory, at one point hitting a four-month low on worries about prospects of higher interest rates and reports of a probe into a high-profile Japanese investment fund.

By the close the NIKKEI-225 index was up 285.57 points at 15,789.31.

"Some short-term players who had gone too short [sold] on blue-chips rushed to cover positions ahead of the release of US May non-farm payroll data," Shinko Securities market analyst Yutaka Miura said.

If the US jobs figures come in weaker-than-expected, that would reduce the pressure for higher US interest rates, a major concern of the moment.


Seoul share prices closed 1.08 percent higher, recovering back above the key 1,300 points level as investors welcomed the stronger performance on Wall Street overnight.

Dealers said the market lost some ground on foreign investor selling but managed to close near the day's high on heavy gains by large caps such as Samsung Electronics.

The KOSPI index closed up 13.95 points at 1,309.04.

"The market clawed back to the 1,300 points level on the Wall Street lead but I'm not sure whether we're off the bottom," Samsung Securities analyst Oh Hyun-Seok said, adding investors are struggling with the prospect of further US rate hikes.

Hong Kong shares prices closed 1.71 percent higher on strong gains in China Mobile and other Chinese telecom stocks as investors hunted for bargains after recent sharp falls.

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