Asian stocks posted their biggest weekly rally since August 2007 as the US and Japan stepped up measures to ease the financial crisis and revive economic growth.
Mitsubishi UFJ Financial Group Ltd, Japan’s biggest bank, jumped 17 percent in Tokyo after the Federal Reserve joined the Bank of Japan in buying government debt. Commonwealth Bank of Australia, the nation’s largest mortgage lender, rose 12 percent in Sydney after the Reserve Bank of Australia said it has scope to further cut rates. PetroChina Ltd, China’s biggest oil producer, rose 4 percent as crude rose to a three-month high.
“The liquidity injections from the Fed and the Bank of Japan have boosted sentiment in the market,” said Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Bank, which manages US$27 billion of Asian assets. “People may start to take profit on this bear-market rally. We’re still a long way from the end of this crisis.”
The MSCI Asia-Pacific Index rose 6.4 percent to 79.53 this week, adding to last week’s 3.9 percent advance.
Japan’s Nikkei 225 Stock Average climbed 5 percent in a holiday-shortened week. Hong Kong’s Hang Seng Index rose 2.5 percent. South Korea’s Kospi Index jumped 4 percent.
Standard Chartered PLC, the UK’s second-largest bank by market value, gained 11 percent in Hong Kong after saying it does not need to raise capital.
Taiwanese share prices are expected to move in a narrow range in the week ahead after the index fell below the 5,000-point level following recent gains, dealers said on Friday.
Foreign institutional investors may continue to unload the electronic sector to take advantage of past technical rebounds with high tech heavyweights seen to bear heavier pressure, they said.
Financial stocks are likely to face further selling amid ongoing worries about rising bad loans in an economic meltdown at home and abroad, they added.
However, raw material stocks are likely to gain as these firms are benefiting from a stronger New Taiwan dollar, which is reducing the cost of imports, they said.
Tourism shares may benefit from hopes that warming cross-strait ties will encourage more Chinese tourists to visit the island, dealers said.
There is still resistance to overcome ahead of 5,000 points, while any downside may be capped at around 4,750 points, dealers said.
For the week to Friday, the weighted index rose 64.23 points, or 1.31 percent, to 4,961.62 after a 5.24 percent increase a week earlier.
Average daily turnover stood at NT$110.08 billion (US$3.25 billion), compared with NT$97.19 billion a week ago.
“Institutional investors have started adjusting portfolios, shifting funds from high tech stocks to old economy ones,” Grand Cathay Securities (大華證券) analyst Mars Hsu said.
Hsu expected select steel and food stocks to show their resilience against technical resistance.
“But, gains among old economy stocks are unlikely to be significant enough to help the broader market stand well above the 5,000 point mark,” the analyst said.
Other regional markets on Friday:
KUALA LUMPUR: Up 0.54 percent. The Kuala Lumpur Composite Index rose 4.64 points to 856.82.
JAKARTA: Up 1.4 percent. The Jakarta Composite Index rose 19.29 points to 1,360.89.
MANILA: Up 3.01 percent. The composite index rose 53.64 points to 1,833.90.
WELLINGTON: Down 1.30 percent. The NZX-50 index fell 34.18 points to 2,599.03.
MUMBAI: Down 0.39 percent. The SENSEX index fell 35.07 points to 8,966.68. Shares recovered from the day’s low on overseas fund buying and hopes that India’s central bank may lower rates as inflation heads toward zero, dealers said.
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