Asian stocks rallied the most in more than a year this week as central bank steps to ease credit markets spurred demand for the cheapest regional shares in at least eight years. Equities still fell the most ever last month.
Samsung Electronics Co, the world＊s biggest computer-memory maker, surged from a three-and-a-half-year low after the US central bank provided funds to South Korea. Reliance Industries Ltd, India＊s most valuable company, rebounded 35 percent, the most in 12 years.
The MSCI Asia-Pacific Index surged 6.9 percent to 85.93 in the five days to Friday, the steepest weekly rise since the period ending Aug. 24 last year. Shares on the gauge had plunged to their cheapest since 2000.
※We＊re coming from a very oversold position, so it deserved a very good bounce,§ said Scott Lim, who oversees about US$850 million as chief executive officer at MIDF Amanah Asset Management SDN in Kuala Lumpur. ※If governments continue to work together and cut interest rates and provide liquidity, we might not see the kind of massive prolonged recession that everybody fears.§
Companies on the gauge fell to an average of 8.2 times trailing earnings on Monday, the cheapest since Bloomberg began tracking the data in 2000. That compared with an average of 19 times during the last five years.
For last month, the index tumbled almost 20 percent amid signs the credit crisis is deepening and as fund redemptions and currency market volatility prompted an exodus of capital from the region. The MSCI Asia-Pacific has lost 45 percent this year, exceeding declines for benchmarks in the US and Europe.
Taiwanese shares are expected to extend their gains in the week ahead on hopes a deal to expand cross-strait ties will be sealed during a visit by a top Chinese negotiator, dealers said.
However, as a recent strong recovery is lifting the market to the nearest technical resistance at around 5,000 to 5,100 points, the market may suffer profit taking and see a cap on the gains, they said.
Despite optimism towards Taiwan-China relations, worries over global financial woes and the world＊s economic slump are expected to continue to weigh in the market, they added.
For the week to Friday, the weighted index rose 291.04 points or 6.36 percent to 4,870.66 after a 7.68 percent decline a week earlier.
Average daily turnover stood at NT$68.42 billion (US$2.09 billion), compared with NT$41.38 billion.
※Investors tend to buy on hopes and sell on news. Once Taiwan and the mainland cut a deal, profit taking is expected to emerge to erode early gains,§ Mega Securities analyst Alex Huang (?玿糗) said.
Japanese stocks closed down 5 percent. The benchmark ended down 452.78 points at 8,576.98, a day after soaring 9.96 percent, its fourth-biggest gain ever.
The TOPIX index of all first section issues fell 32.25 points, or 3.59 percent, to 867.12.
Shares closed 2.5 percent lower, led by a decline in property and financial stocks as local banks kept rates unchanged, despite a US cut. The benchmark Hang Seng Index was off 361.18 points to 13,968.67.
Australian share prices closed up 0.4 percent. The benchmark S&P/ASX200 rose 16.9 points to 4,018.0, while the broader All Ordinaries gained 25.4 to 3,982.7.
Chinese share prices closed down 1.97 percent. The benchmark Shanghai Com〝posite Index, which covers A and B shares, fell 34.82 points to 1,728.79. The Shanghai A-share index lost 36.66 points, or 1.98 percent, to 1,816.31 while the Shenzhen A-share index shed 7.20 points, or 1.43 percent, to 495.22.
South Korean share prices closed 2.6 percent higher on Friday. The KOSPI index rose 28.34 points to 1,113.06 points.
Shares closed 0.43 percent lower. The main Straits Times Index fell 7.71 points to 1,794.20.
Malaysian share prices closed 1.2 percent higher. The Kuala Lumpur Composite Index was up 10.05 points at 863.61.
Thai share prices closed 2.01 percent higher. The Stock Exchange of Thailand composite index rose 8.22 points to 416.53 points, while the blue-chip SET-50 index gained 7.23 points to 288.76.
Indonesian shares ended up 7.1 percent. The Jakarta Composite Index rose 82.84 points to 1,256.704 on volume of 6.6 billion shares.
Philippine share prices closed 4.6 percent higher. The composite index surged 86.16 points to close at 1,951.09.
New Zealand share prices closed up 2.10 percent. The benchmark NZX-50 index rose 58.04 points to 2,820.86.
Indian shares surged to close up 8.22 percent on hopes of a rate cut from India＊s central bank after similar action across the globe earlier in the week.
The benchmark 30-share SENSEX index finished up 743.55 points at 9,788.06.
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