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Tokyo bounces on deal talk
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August 19, 1999: 6:01 a.m. ET
Nikkei recovers on discussions to create $1.3 trillion bank; HK soars 3.5 percent
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LONDON (CNNfn) - Most Asian markets staged a broad advance Thursday while Tokyo relied on reports of a gigantic bank merger to cut its early losses.
Japanese stocks suffered from the sharp climb in the yen which threatened to test a new resistance level of 110 yen to the dollar. Hong Kong and Seoul surged.
The benchmark Nikkei 225 in Tokyo closed down just 12.5 points at 17,879.74 after losing more than 170 points or 1 percent at midday. Reports of merger talks between Fuji Bank, Industrial Bank of Japan and Dai-Ichi Kangyo Bank sparked an afternoon recovery.
Technology and export-reliant firms had suffered sharp sell-offs as the stronger yen put an end to seven successive gains.
In Hong Kong, the Hang Seng soared 3.16 percent or 40 points to 13,403.59 as blue and red chips enjoyed strong demand.
The Straits Times in Singapore also climbed back from an early fall to close up 17.5 points or 0.85 percent at 2,066.39. The Kospi in Seoul recovered from recent weakness to close up 2.24 points or 0.26 percent at 871.18.
Tokyo's abrupt turnaround was almost entirely due to the bounce in financial stocks on the reports that three of the country's largest banks were in alliance talks. Fuji, DKB and IBJ all gained more than 11 percent before being suspended after hitting daily trading limits.
The gains in banks outweighed sharp falls in tech stocks, led by a 9 percent fall at Pioneer and drops of 5.5 percent and 3.5 percent, respectively, at Fujitsu and Sony. The yen reached a six-month high of 111.37 yen.
Hong Kong firmed across the board, with just one stock failing to advance. Telecom and China-based H-shares led the pack, with Hutchison Telecom up 2.1 percent and China Telecom gaining 3.5 percent.
Among red chips, Citic Pacific rose 5 percent and New World Development advanced 6.3 percent while Shanghai Industries gained 2.4 percent.
Heavyweight HSBC Holdings enjoyed a 2.1 percent rise and conglomerates also surged, led by a 6.4 percent climb by Swire Pacific.
Other markets benefited from the calmer outlook for U.S. interest rates. Jakarta jumped 3.6 percent while Manila closed 2.6 percent higher. Taipei and Kuala Lumpur bucked the trend with modest losses.
The All Ordinaries in Sydney closed up just 1 point at 3,027.1 while Thailand added 0.8 percent. 
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