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Tokyo recovers some ground
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May 20, 1999: 5:37 a.m. ET
Nikkei recovers despite economic uncertainty, HK hit by rate worries
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LONDON (CNNfn) - Asian markets faltered in early trading but recovered on the back of Wall Street's late rally, despite fears of another emerging-market meltdown as Argentina teetered on the edge of devaluation.
In Tokyo, the Nikkei 225 average rallied after early losses had taken it below the psychologically important 16,000 level for the first time since April 1. The index clawed its way back to close at 16,199.99, a gain of 71.81 points or 0.45 percent.
In Hong Kong, the Hang Seng index pared early gains and closed down 0.22 percent at 12,375.42 as blue chips faltered on interest rate worries despite the earlier gains in New York and Tokyo. Singapore's Straits Times index lost a little ground in afternoon trading but closed up 0.81 percent at 1,926.89 after peaking at 1,938.80 at midday.
In Sydney, the All Ordinaries closed down 0.96 percent at 2,952.6 while Thailand and Indonesia took heart from a statement from IMF calling for them to pursue relaxed monetary policies. Manila stocks closed gently lower on mainly local trading. Kuala Lumpur made ground on expectation of a general election.
South Korea's Kospi index slumped 3.6 percent, as program selling battered stocks.
The Dow Jones Industrial average enjoyed a late rally Wednesday to close up 50.44 points at 10,887.39 while the S&P 500 added 10.91 to close at 1,344.23. The Nasdaq Composite rose 19.04 to 2,577.40.
In Tokyo, mounting concern over Japan's economic recovery weighed heavily on banking stocks. The Bank of Japan said that the country's long economic decline was ending but investors focused on the bank's assertion that there were few signs of recovery.
The benchmark index opened lower and continued to lose ground, ending the morning session down 0.87 percent at 15,987.57. However, bargain hunting in the afternoon session after five straight days of losses helped pull buyers back into the market.
Bad debt worries hit the banking sector hard with Bank of Tokyo-Mitsubishi losing 3.41 percent to end at 1,560 yen, Fuji Bank shedding 1.89 percent at 778 yen and Sumitomo Bank dropping 2.61 percent to 1,458.
The busiest corporate reporting week of the year again provided mixed signals. Mazda Motor Corp. reported its first consolidated profit in five years, the 38.71 billion yen surplus compared with a loss of 6.80 billion yen the year before.
Sony Corp. benefited from the opening of the new Star Wars film and added 3.92 percent to close at 11,410 yen.
The star performer was Japan Radio Corp. which climbed strongly thanks to expected strong demand for its new cellular phone system, to reach 765 yen, a rise of 15.04 percent.
In Hong Kong, the Hang Seng was boosted in early trading by New York's performance and the resumption of talks between China and the United States over the former's entry to the World Trade Organization.
However, fears of higher U.S. interest rates continued to afflict the bellwether stocks. HSBC Holdings fell 0.8 percent to HK$255 while Swire Pacific lost 2.4 percent to close at HK40.40. Cheung Kong shed 1.2 percent at HK$63.75.
The momentum in Singapore was driven by strong GDP growth in the first quarter and an 8.1 percent jump in non-oil domestic exports -- double market forecasts which boosted manufacturing and electronics stocks.
Tobacco group Rothmans Industries was among the main gainers following a cash bid for the firm from its parent, British American Tobacco (BATS).
In Sydney, the All Ordinaries remained hamstrung by the collapse in gold prices. Commodity stocks pulled the market down with BHP and Rio Tinto both losing ground.
-- from staff and wire reports
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