Asian stocks chalked up thin gains in a cautious technical bounce on Friday as concerns over the US interest rate outlook meant another weak performance on Wall Street provided no support, dealers said.
They said there was no incentive to take aggressive positions on the day as a deadly bomb in Kabul drew fresh attention to the terrorist threat ahead of the fifth anniversary of the Sept. 11 attacks on the US tomorrow.
The main issue remained the possibility the US Federal Reserve will hike interest rates again -- rather than remain on hold -- after the latest US salary figures pointed to future inflation pressures.
The markets had been looking ahead to next year and the prospect the Fed would begin cutting rates as the US economy slowed but those hopes appear moot, at least until the US central bank meets again Sept. 20 and gives fresh guidance.
Taiwan share prices closed 0.12 percent higher as robust sales figures last month from select companies offset the negative impact of further losses on Wall Street, dealers said.
Turnover remained thin, however, in cautious trade, with many investors on the sidelines ahead of yesterday's protest against President Chen Shui-bian (
The weighted index added 7.88 points at 6,693.11, off a low of 6,654.77 and a high of 6,718.83, on turnover of NT$62.67 billion (US$1.90 billion).
Declines led gains 530 to 488, with 190 stocks unchanged.
Select technology firms rallied on solid sales last month, while tourism-related stocks lost ground following a report that China wants parallel negotiations with Taiwan over more charter cross-strait flights and allowing more Chinese tourists to visit Taiwan.
The report raised worries that the expected relaxation of policy regarding Chinese tourists may be delayed, dealers said.
First Taisec Securities manager Stanley Hsu said the market continued its rangebound consolidation as political concerns lingered.
"Turnover was light because investors stayed on the sidelines, given uncertainties surrounding the outcome of [yesterday's] sit-in protest," Hsu said.
Going forward, investors will keep a wary eye on any confrontation that may arise during the protests that began yesterday, he said.
Taiwan Semiconductor Manufacturing Co. fell NT$0.40 to NT$56.70 and United Microelectronics Corp was unchanged at NT$18.05.
Japanese share prices rose 0.42 percent, recovering from early losses to stay above the key 16,000-point level after the Bank of Japan left its super-low interest rates unchanged, dealers said.
The market had fallen in early trade after another weak performance on Wall Street but support picked up after the settlement of the special quotations on futures and options contracts, dealers said.
The decision by the central bank to keep the key rate of borrowing at 0.25 percent, though widely expected, offered extra relief in late trade.
The Tokyo Stock Exchange's benchmark Nikkei-225 index gained 68.05 points to close at 16,080.46. The broader TOPIX index of all first-section stocks rose 6.46 points or 0.40 percent to 1,619.92.
Gains led losers 986 to 571, with 144 stocks unchanged.
Volume jumped to 2.40 billion shares from 1.72 billion shares on Thursday.
Hong Kong share prices closed 0.29 percent higher on a technical rebound after falls over the past three sessions, with investors focusing on changes to the city's blue-chip index, dealers said.
China Construction Bank (CCB), Hong Kong Exchange and Clearing (HKEx) and Foxconn will join Hang Seng Index constituents from tomorrow and these stocks all attracted support accordingly.
Dealers said said select property and finance stocks also drew interest although the gains were capped due to caution ahead of the weekend.
The Hang Seng Index was up 49.32 points at 17,145.76, off a low of 17,070.91 and a high of 17,171.54. For the week the index was down 277.96 points or 1.6 percent.
CCB, HKEx and Foxconn will join the HSI from tomorrow, while Lenovo and Johnson Electric will be removed from the index. The changes will take the number of HSI constituent stocks to 34 from 33 currently.
Foxconn closed up HK$0.50 at HK$23.05, China Construction Bank was up HK$0.02 at HK$3.42 and HKEx added HK$1.10 at HK$54.95 while Lenovo lost HK$0.08 to HK$2.78 and Johnson Electric was down HK$0.11 at HK$5.80.
Chan said the focus next week will be on stocks whose weightings on the HSI will change following the index reshuffle.