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Japan stocks celebrate
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June 10, 1999: 7:37 a.m. ET
GDP report's glow sends Tokyo blue chips up almost 3%; Hong Kong lower
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LONDON (CNNfn) - Japanese blue chips soared nearly 3 percent Thursday as the market eagerly anticipated GDP data - released just after the market closed - that hinted at the first sign of an economic recovery.
The figures were released half an hour after the market closed, and indicated a stunning 1.9 percent rise in economic activity over the previous quarter -- far higher than consensus forecasts and the first quarterly growth in a year and a half.
The Nikkei 225 index of leading shares rocketed 480.12 points to close at 17,102.62, a rise of 2.89 percent, on anticipation of the better-than-expected data.
In Hong Kong, however, the blue chips slipped into the red at the close, with traders saying an earlier surge prompted concern that stocks were fundamentally overvalued.
The Hang Seng index closed 35.21 points lower at 12,839.21, a drop of 0.27 percent. It was up 140 points earlier in the session, piercing the 13,000 point barrier, on the back of a bigger-than-expected Chinese interest rate cut averaging three-quarters of a percentage point.
Bucking the downward trend were "red chips," companies with significant exposure to the rest of China, which were up 3.93 percent, and "H-shares" of Chinese incorporated companies, which were up 7.41 percent.
Elsewhere, Asian markets generally ignored Wednesday's mixed session on Wall Street, and took their cue from Tokyo's strong showing. The Dow Jones Industrial average was 75 points lower to close at 10,690.29, while the tech-heavy Nasdaq ended almost 45 points higher.
Cyclical stocks benefited the most from the strong rally in Tokyo, with the steel sector leading the way. Kawasaki Steel surged 8.6 percent to close at 240 yen, while Nippon Steel leapt 7.63 percent to 282 yen.
The renewed optimism allowed investors to brush aside concerns about the strengthening of the yen against the dollar as it broke through the 118 yen mark. Export-related stocks held their own, with Nikon Corp. up 4.17 percent at 1,699 yen, while Honda Motor ended 2.69 percent higher at 5,350 yen.
Construction giant Kajima Corp. soared almost 11 percent to close at 397 yen, after the group said it would post net profit of 13 billion yen ($109 million) for 1999-2000 versus a loss of 198.56 billion yen last time.
In Hong Kong, Cathay Pacific shares closed 1.2 percent lower at HK$11.95. The airline said it had resolved the damaging dispute with its pilots after the market closed.
The buying spree in Tokyo helped buoy other markets in the region.
The Straits Times index in Singapore closed 23.46 points higher at 2,030.00, a rise of 1.17 percent, while South Korea's Kospi surged 6.55 percent, or 52.60 points, to 856.06.
Seoul blue chips rebounded after their biggest one-day points loss Wednesday. Dealers said overseas investors were returning to the market, while export-relates stocks were boosted by the strengthening of the yen.
The Australian market was the only one that remained focused on events across the Pacific, with U.S. interest rate jitters and weak precious metals prices taking their toll on the All Ordinaries index. Blue chips in Sydney closed 6.9 points lower at 2,978.6, a fall of 0.23 percent.
In Manila, the Composite index closed 6.45 points higher at 2,372.90, a rise of 0.27 percent, while the Weighted index in Taiwan closed up 39.05 points to 7,996.76, a rise of 0.49 percent.
In Indonesia, the JSX index regained some of its earlier losses to end down 2.12 percent lower at 664.57, as concerns about the outcome of the elections in the country continued.
In Kuala Lumpur, the Composite index ended 1.35 percent higher at 767.69 points, while Thailand's SET index closed almost flat at 511.44.
-- from staff and wire reports
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