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ASIA: Asian stocks rise for second week on bank rate cuts

PHOTO: AFP

Asian stocks rose for a second week, the first consecutive gain in six months, after central banks cut interest rates and US president-elect Barack Obama’s victory in the US election sparked speculation his spending plans will stimulate growth.

Mizuho Financial Group Inc jumped 20 percent, the best week since 2003, as Japan’s three-month interbank rate tumbled the most in almost a decade. Shinhan Financial Group Ltd gained 16 percent after South Korea pledged to pump US$10.5 billion into its economy and the Bank of Korea lowered rates for the third time in a month. Nintendo Co, the world’s biggest maker of handheld video-game consoles, rallied 7 percent after the election of Obama, who has urged Congress to pass a US$175 billion economic stimulus bill.

“The stability of financial markets has been restored somewhat,” said Hideyuki Ookoshi, who helps oversee about US$365 million at Chiba-Gin Asset Management Co in Tokyo. “Investors are keeping a keen eye on government efforts to shore up banks’ capital, which is the key to the recovery of global economies.”

The MSCI Asia-Pacific Index added 1.5 percent to 87.23 in the five days to Friday. It’s the first time the gauge has risen for consecutive weeks since May. A measure of financial companies climbed 5.1 percent, the most among the index’s 10 industry groups.

MSCI’s Asian index has lost 45 percent this year, exceeding declines for benchmark indexes in the US and Europe, as the 15-month credit crisis curtailed lending, and fund redemptions and currency market volatility prompted an exodus of capital from the region.

TAIPEI

Taiwanese share prices are expected to challenge the key 5,000-point mark on an extended technical rebound as investors hunt bargains, dealers said on Friday.

After being seriously hit recently, financials may continue to lead the upside on optimism of closer cross-strait economic exchanges which are expected to produce more opportunities in China for the sector, they said.

Investors also set aside anti-China sentiment from the Democratic Progressive Party, even though violent protests against a visit by a top Chinese envoy left more than 60 police and dozens of others injured, dealers said.

Buying interest is likely to shift back to transport and tourism stocks after Taiwan and China signed historic agreements on direct air and shipping links, they said.

While the market may rise to 5,000 points again next week, selling pressure may emerge to erode the gains with technical support at around 4,500 points, dealers said.

For the week to Friday, the TAIEX lost 128.33 points, or 2.63 percent, to 4,742.33 after a 6.36 percent increase a week earlier.

Average daily turnover stood at NT$72.04 billion (US$2.2 billion), compared with NT$68.42 billion a week ago.

The market staged a comeback in late Friday trading, recovering from early heavy losses, after a plunge on Thursday.

TOKYO

Japan’s Nikkei stock index ended down 3.55 percent. The benchmark fell 316.14 points to 8,583.00.

The TOPIX index of all first section issues fell 30.30 points, or 3.33 percent, to 879.00.

HONG KONG

Shares closed 3.3 percent higher. The benchmark Hang Seng Index was up 453.39 points to 14,243.43.

Analysts said investors likely saw a 25 basis point rate cut by HSBC as a sign of easing pressures on a tight interbank market, as local commercial banks had been reluctant to lend to one another due to the global credit crisis.

SYDNEY

Australian shares closed down 2.4 percent. The benchmark S&P/ASX200 closed down 98.4 points to 4,051.3, while the broader All Ordinaries fell 99.9 points to 4,006.6.

The fall followed a 4.3 percent drop on Thursday.

SHANGHAI

Chinese share prices closed up 1.75 percent.

Shares opened lower after some index heavyweights posted weak earnings or cut production, but bargain hunters emerged after the break on hopes Beijing may cut interest rates in the coming months, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, closed up 29.99 points to 1,747.71.

SEOUL

South Korean share prices closed 3.9 percent higher. The KOSPI index ended up 42.27 points at 1,134.49.

SINGAPORE

Singapore shares closed 2.43 percent up. The main Straits Times Index rose 44.29 points to 1,863.49.

KUALA LUMPUR

Malaysian share prices closed 0.2 percent lower. The Kuala Lumpur Composite Index lost 2.00 points to close at 893.95.

BANGKOK

Thai share prices closed 0.19 percent higher. The Stock Exchange of Thailand (SET) composite index edged up 0.88 points to close at 463.81.

JAKARTA

Indonesian shares ended up 2.3 percent. The Jakarta Composite Index rose 30.47 points to 1,338.36.

MANILA

Philippine share prices closed 1 percent lower. The composite index lost 20.28 points to 1,921.34.

WELLINGTON

New Zealand share prices closed 1.71 percent lower. The benchmark NZX-50 index fell 48.48 points to 2,791.65.

MUMBAI

Indian shares rose 2.36 percent. The benchmark 30-share SENSEX index rose 230.07 points to 9,964.29.
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