Asia’s benchmark stock index fell for a third week after Lehman Brothers Holdings Inc collapsed and the US took control of American International Group Inc. Declines narrowed on government measures to support markets.
Macquarie Group Ltd, Australia’s largest investment bank, and Cathay Financial Holding Co (國泰金控), Taiwan’s biggest financial services company, both tumbled 18 percent.
The MSCI Asia-Pacific Index fell 1.8 percent to 114.15 this week. The gauge fell to a three-year low on Thursday as concerns grew that more financial companies will collapse, before rebounding on Friday as central banks pumped cash into money markets and the US worked on plans to shore up banks and insurers.
PHOTO: AP
“Investors don’t believe that things will be over so quickly,” said Yuuki Sakurai, general manager of financial and investment planning in Tokyo at Fukoku Mutual Life Insurance Co, which manages the equivalent of US$54 billion in assets. “It’s like an aspirin for the market; it takes away the headache, but it doesn’t cure the problem.”
Asian governments joined their European and US counterparts in support of stock markets.
Japanese equities on Friday surged the most in eight months, cutting by more than half a slump this week as the Bank of Japan pumped more money into the financial system than it has in at least six years. It joined the Federal Reserve in offering financial institutions as much as US$60 billion to ease a dollar shortage.
China’s benchmark stock index, the world’s third-worst performer this year, on Friday rallied the most since the gauge was created in April 2005, erasing most of the CSI 300 Index’s losses this week. The Chinese government said it would buy shares in three of the largest state-owned banks and scrapped the tax on equity purchases to halt a slide that erased US$2.64 trillion of market value.
Earlier in the week, China cut interest rates for the first time in six years and allowed most banks to set aside less reserves.
TAIPEI
Taiwanese share prices are expected to benefit from improved sentiment after the US government announced a rescue package to take on the worst financial crisis in decades, dealers said on Friday.
Institutional investors who had just resumed buying following the latest Wall Street rally may keep hunting bargains, including large cap electronics and financial heavyweights, after recent steep declines, they said.
Buying interest is expected to lift the market to the nearest technical resistance level of 6,200 to 6,300 points in the first half of next week, while profit taking may surface in the second half on lingering concerns about the local economy, dealers said.
For the week to Friday, the weighted index closed down 340.30 points or 5.39 percent at 5,970.38 after a 0.05 percent rise a week earlier. Average daily turnover stood at NT$91.70 billion (US$2.85 billion), compared with NT$88.98 billion a week ago. The market staged a strong comeback on Friday, gaining 5.82 percent.
“Friday’s rebound is unlikely to stop there on high hopes of the US rescue actions. I expect the momentum to continue into next week,” Taiwan International Securities Corp (金鼎證券) analyst Arch Shih (施博元) said.
TOKYO
Japanese shares closed up 3.76 percent, dealers said.
The Tokyo Stock Exchange’s benchmark Nikkei-225 index closed up 431.56 points to 11,920.86. The broader TOPIX index of all first-section shares rose 51.44 points or 4.69 percent to 1,149.12.
Rallies were led by banks and securities on easing concerns over the global credit crisis as the US began drafting a plan to wipe away the bad debts that have weighed on banks and sparked the current crisis.
The market also gained from an easing of the yen against the dollar, which is good news for Japanese exporters.
But Seiichi Suzuki, an analyst at Tokai Tokyo Securities, said the rally was partly a tracking of the Wall Street rebound and partly a “knee-jerk reaction” to news of a possible US government bailout.
HONG KONG
Hong Kong shares closed up 9.6 percent, dealers said.
The Hang Seng Index added 1,695.27 points to finish at 19,327.73, posting its biggest gain in eight months.
SHANGHAI
Chinese share prices closed 9.46 percent higher, dealers said.
The benchmark Shanghai Composite Index, which covers A and B shares, was up 179.25 points at 2,075.09.
The Shanghai A-share Index gained 188.21 points, or 9.45 percent, to close at 2,179.11 and the Shenzhen A-share Index jumped 51.00 points, or 8.88 percent, to 625.33.
The government announced late on Thursday it had canceled the 0.1 percent stamp duty on buying stocks and would let its investment arm buy shares in three major banks to boost the weakening stock market.
Many shares surged the maximum daily limit of 10 percent early in the day, but analysts said anxiety over the outlook in overseas markets and overhang from a glut of share supplies would continue to weigh on sentiment.
SYDNEY
Australian shares rebounded to close 4.3 percent higher, dealers said.
The benchmark S&P/ASX 200 rose 198.2 points to 4,805.5, while the broader All Ordinaries was up 190.7 points at 4,842.6.
SEOUL
South Korean shares closed 4.6 percent higher, dealers said.
The KOSPI index ended up 63.36 points at 1,455.78.
Steel and shipyard shares led the overall sharp gains in Seoul.
SINGAPORE
Shares closed 5.78 percent higher, dealers said.
The blue-chip Straits Times Index rose 139.86 points to 2,559.07. Risers outnumbered decliners 523 to 127 with 702 issues unchanged.
However, Kim Eng Securities said the downside risk for the market remains high. The firm told investors to remain on the sidelines “as it is really painful to be catching a falling sword.”
KUALA LUMPUR
Malaysian share prices surged 3.4 percent higher, dealers said.
The Kuala Lumpur Composite Index rose 34.04 points to close at 1,025.70.
BANGKOK
Thai share prices closed 4.07 percent higher, dealers said.
Sentiment at the Thai bourse also improved due to easing political tension in the country the day after the new prime minister officially took up his duties, they said.
The Stock Exchange of Thailand (SET) composite index rose 24.45 points to close at 624.83 points.
JAKARTA
Indonesian shares jumped 5.8 percent higher, dealers said.
The Jakarta Composite Index recorded its biggest percentage gain for 2008, rising 104.06 points to 1,891.73.
MANILA
Philippine shares rose 4.69 percent, dealers said.
The composite index gained 110.42 points to 2,462.79 points.
WELLINGTON
New Zealand share prices closed up 0.89 percent, dealers said.
The benchmark NZX-50 index gained 28.20 points to 3,187.13.
MUMBAI
Indian shares surged 5.46 percent, traders said.
The BSE benchmark 30 share SENSEX index rose 726.72 points to 14,042.32.
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