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HK surges almost 600 points
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June 21, 1999: 5:25 a.m. ET
Weak yen prompts 300 point rally in Japan, Hang Seng jumps almost 4.5%
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LONDON (CNNfn) - Asian markets enjoyed a strong session Monday as Japanese blue chips surged over 300 points. Hong Kong had an even stronger session, catapulting the headline index to a new year high with a gain of almost 4.5 percent.
Overseas buying and the weakness of the yen drove the Nikkei 225 index of leading shares 1.76 percent higher to close at 17,738.85, a gain of 307.59 points.
Earlier in the session the Nikkei hit a 20-month high of 17,722.52, as overseas investors targeted tech stocks, and export-related companies got a boost from a weakening yen, as the Bank of Japan once again jumped into the market to buy dollars.
The central bank has intervened in the market several times recently, buying dollars in an effort to keep the yen around the 120 mark and boost the economy further. The BoJ was widely rumored to have intervened twice during the morning session Monday.
Investor confidence got a further boost from a positive session on Wall Street Friday, with the Dow Jones Industrial average ending the session 13.95 points higher at 10,855.56.
Technology shares made some of the biggest gains in Tokyo, with their large export-related earnings stream attracting buyers. Sony Corp. jumped 5.61 percent to end at 12,980 yen, while Nikon Corp. surged a massive 212 yen to close at 2,050 yen, a jump of over 11 percent.
Fujitsu hit a new 1999 high as it closed just over 4 percent higher at 2,415 yen. The electronics group is still benefiting from its planned link-up with Germany's Siemens to create Europe's second largest PC maker.
Hong Kong's Hang Seng took its cue from and then outdid Tokyo with a strong rally in the afternoon session, which saw the index soar 585.96 points to close at 13,994.23, a rise of 4.37 percent.
Sentiment got a huge boost from the announcement by the Hong Kong government that it would not dump its large equity holding on the market. Instead, the stock holdings will be listed as a unit trust. "The statement lifts sentiment since it helps eliminate the uncertainty about the disposal of government shares," said Kinson Au, research manager at Asia Financial Securities.
The news buoyed index heavyweight HSBC to a new high of HK$300, a rise of over 3 percent.
Other markets also rallied strongly. South Korea's Kospi index surged to a 3-year high at the close, jumping over 3.7 percent to close at 869.00, a gain of more than 31 points. Singapore's Straits Times index was almost 2.2 percent higher at 2,116.48.
Sydney's All Ordinaries failed to hold on to gains and slipped 3.3 points to end 0.11 percent lower at 2,981.7 as the market focused on worries of a negative start to Wall Street trading later Monday.
Earlier, Philippine blue chips gained almost 19 points higher to end at 2,448.62. Taiwan's Weighted index jumped almost 140 points, or 1.7 percent, to end at 8,413.48.
Bangkok's Set index was making strong gains late in the session, up almost 3 percent at 533.96, while Jakarta's blue chips pared some earlier gains to trade just under 1 percent higher at 714.91.
Kuala Lumpur's Composite index erased earlier losses to trade just inside positive territory at 786.94.
-- from staff and wire reports
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