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Asian stocks surge
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November 11, 1998: 5:07 a.m. ET
Hong Kong and Singapore up more than four percent, Japan up two percent
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LONDON (CNNfn) - Hong Kong and Singapore stocks surged Wednesday while Tokyo also posted good gains following across-the-board losses Tuesday.
Investors apparently ignored losses in Europe and on Wall Street Tuesday to finish the day firmly in the plus column.
Australia, Indonesia, Malaysia, the Philippines and Thailand all also finished in the black with only Taiwan and Korea finishing with losses.
In Japan the market was boosted by renewed hopes the government would include tax cuts in its economic stimulus package due out next week, traders said.
Mixed corporate results were also a feature as the Benchmark Nikkei index rose 2.27 percent or 319.93 points to 14,428.02, the highest level of the day. December futures closed 370 higher at 14,480.
Banking stocks were stronger with Sanwa Bank up 4.58 percent at 1,005 yen. Auto exporters Honda Motor and Mazda Motor closed up more than 4 percent at 4,310 and 470 respectively.
Jens Munster, head of West LB Securities, said signs of an agreement between the ruling Liberal Democratic Party and the opposition on a controversial plan to issue shopping vouchers to citizens had boosted sentiment.
"People now hope other legislation in Japan may be possible, such as cutting VAT back from five percent to three percent or even zero percent to boost consumption," he said.
"The market took a spurt based on futures buying. The banks were slightly firmer based on this."
Singapore closed up an impressive 5.53 percent or 64.76 points at 1,236.82 after a government committee called for wage cuts and lower state charges to minimize unemployment.
The strengthening local currency also boosted sentiment, according to traders.
Hong Kong leaped 415.99 points or 4.28 percent to 9,870.69 after surging in afternoon trade.
Local traders led buying early on but overseas brokerages returned to the market after lunch.
"The market gained confidence in itself after it bounced off its resistance level of 9,700 or 9,600," said South China Brokerage sales director Douglas Hansen-Luke.
But he warned the rally might be a temporary blip for the Hang Seng Index. "It's trading about 14 times future price-earnings," he added. "That is the level for the middle of the cycle, not the middle of a recession."
Banking and property stocks also performed well. HSBC Holdings was up HK$5.5 at HK$181.5. Sun Hung Kai Properties was up HK$4 to HK$52.
New World Development rose 9 percent to HK$18.10 after pledging to invest HK$2 billion to strengthen its local mobile communications services.
Cathay Pacific jumped 7.6 percent to HK$7.75 as the territory's flagship carrier reached an agreement in principle on an alliance with troubled Philippine Airlines.
Australia closed up 1.43 percent while the see-sawing Philippine market ended the day 4.34 percent higher.
Thailand closed up 5.83 percent after lunch as investors went bargain hunting after the steep slides of this week. Bank stocks were the most active.
Indonesian stocks climbed 1.6 percent as a special session of the country's top legislative body, the People's Consultative Assembly, continued without major unrest. Malaysian stocks were up 1.84 percent.
Taiwan finished down 2.31 percent while Korea lost 2.54 points to close at 400.70. 
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