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Taiwan surge soothes Asia
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July 20, 1999: 5:12 a.m. ET
Taipei's $15B stimulus package cheers HK; Tokyo closed for holiday
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LONDON (CNNfn) - Hong Kong shares pared early gains but still ended more than 1 percent higher Tuesday. Taiwan shares surged 5.7 percent as the island's government pledged a massive stimulus package to soothe tensions in an escalating war of words with China. Tokyo was closed for a public holiday.
Taiwan's 419-point spurt, to 7,806.85, came as the island's government announced plans to plow T$500 billion ($15 billion) into Taipei's stock market to help stabilize the index following last week's 13 percent freefall.
That slide was triggered by fears that an armed conflict might erupt unless the island's maverick President, Lee Teng-hui, scrapped his new commitment to "state-to-state" relations and reverted to the long-held "One China" policy. Chinese President Jiang Zemin told U.S. President Bill Clinton this week he had not ruled out the use of force to resolve the conflict.
The Taiwan news gave Hong Kong's blue-chip Hang Seng index a heady adrenaline spurt early in the session. But after ending the morning session up 216.35 points, the index ebbed in the afternoon as investors selectively dumped small-cap stocks. The Hang Seng finished 153.27 points, or 1.14 percent higher, at 13,600.40.
On the mainland, hard currency shares on the Shenzhen B index ended up 9.85 percent Tuesday as investors anticipated new measures by the Chinese government aimed at boosting market performance. The enthusiasm over the reform measures overshadowed jitters about the lingering Taiwan-China dispute.
In Hong Kong, major index constituent China Telecom also lent support, rallying 7.4 percent, to end at HK$23.800. The gains wiped out Monday's losses, when the stock skid 6.34 percent. Other red-chip, or China-affiliated stocks, also performed well in Hong Kong.
Property group Hutchison Whampoa closed up HK$2.00 at HK$73.750 a day after the company's managing director said Hutchison had $5 billion in spare cash but had no immediate plans to make share placements. Speculation about share placements by big-name blue chips has concerned some investors in recent weeks.
Sentiment was also bullish in Singapore, though activity remained light ahead of June trade data. The Straits Times Index was up 0.78 percent at 2,137.91 in late trade. Local traders said optimism over the trade figures, due out later Tuesday, had offset some of the market's sagging spirits after last week's decline.
Australia's All Ordinaries rose 1.4 percent, to finish at 3,127.1, buoyed by gains in heavyweight industrials, while Thai stocks had advanced 0.63 percent by late-day trade, supported by the firm showings in Hong Kong and Singapore.
But elsewhere across the Pacific Rim, the picture was negative. Traders failed to find sustenance in Wall Street, where the three leading gauges slipped overnight as investors shrugged off strong corporate earnings and cashed in blue chips.
Malaysian stocks receded 1 percent amid selling by overseas funds, led by Templeton Asset Management. Templeton's Mark Mobius said recently that he was withdrawing due to the government's capital controls.
Jakarta shares were down 1.28 percent after news of another delay in the vote-tallying from the country's June 7 parliamentary elections. Last week, a completed count showed that populist opposition leader Megawati Sukarnoputri was leading, but fell short of a majority, meaning a coalition seemed inevitable.
South Korea's Kospi closed down 2.55 percent, at 998.45, amid jitters over restructuring at the Daewoo Group. Philippine shares ended 0.32 percent lower, at 2,551.42, as investors expressed caution amid sentiment that interest rates may have bottomed out. Manila has lowered rates 20 times so far this year.
--from staff and wire reports
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