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HK leaps 4%, Tokyo in tow
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October 29, 1999: 7:02 a.m. ET
Wall St. gains spark confidence rally across Asia as rate worries recede
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LONDON (CNNfn) - Hong Kong stocks stormed up nearly 4 percent Friday, trailed closely by Japanese shares. They were swept higher by market jubilation in the wake of sharp overnight rallies on Wall Stree.
Most other Asian markets posted impressive gains as traders toasted the felicitous mix of tame inflation and strong output growth provided by Thursday's U.S. economic data, released after Asian markets had closed.
Asia's markets shrugged off a warning by Federal Reserve Board Chairman Alan Greenspan Thursday that the U.S. economy may be growing beyond its potential, and that job growth may have to slow in order to avert a jump in inflation.
Japan's bellwether Nikkei 225 average soared 3.03 percent, or 528.37 points, to 17,942.08, encouraged by a broad-based rally on Wall St. amid easing interest-rate concerns.
Export-driven stocks benefited from continued strength in the dollar as it traded above 105 yen, slightly higher than where it finished in New York late Thursday.
Sony Corp. romped up 3.5 percent, to 16,260 yen, boosted by the dollar's strength against the yen, while Fujitsu added 3.3 percent to end at 3,140 yen. Toshiba shares, by contrast, tumbled more than 6 percent, closing at 656 yen, after the company said it would post an extraordinary loss of 110 billion yen in 1999-2000 in order to settle a U.S. lawsuit related to its floppy disk controllers.
A late-day burst of buying enthusiasm carried Hong Kong's Hang Seng to a 3.9 percent higher close, at 13,256.95, a gain of 498.07 points. But the gains were unevenly distributed, with two heavyweights - HSBC Holdings and China Telecom - accounting for 326.23 points, or 65.5 percent of the overall market rally.
China Telecom soared 7.7 percent, to HK$1.90, as investors cheered a successful 560 million new-share placement by index heavyweight China Telecom. HSBC closed up nearly 6.3 percent, at HK$93.25.
The narrow concentration of gains in a handful of stocks suggested investor wariness ahead of the government's pricing next week of a giant public offering, called the Tracker Fund. The offering represents a portion of the portfolio amassed by the government during last year's controversial market intervention.
The gains across Asia followed a sharply higher session Thursday on the Dow Jones industrial average, which finished up 2.2 percent, or 227.64 points after the latest U.S. GDP and employment cost figures provided tonic to investors.
The broader S&P 500 index climbed 3.5 percent, or 45.72 points, its second-biggest point gain ever. The tech-heavy Nasdaq forged ahead 2.6 percent.
In Seoul, the Kospi advanced 1.5 percent to end at 833.51 after trading in a tight range throughout the session. Strong bank and insurance stocks helped carry Australia's All Ordinaries to a 1.04 percent higher close at 2,885.1. Media conglomerate News Corp. ended at its highest level in nearly six weeks despite a sharp drop in first-quarter earnings as it's film unit suffered in comparison to 1998.
The sole regional decliner was Malaysia, which closed down 1 percent on budget-related worries. Jakarta leapt 2.8 percent as investors went bargain hunting on the back of the Dow surge.
Manila stocks scored a two-week high, ending up 3.4 percent on brisk buying in blue chips and index-related stocks. The weighted index in Taiwan climbed 0.3 percent. The electronics index ended 1.5 percent higher. Thai stocks ended up 1.4 percent on strong retail buying.
In Tokyo, local traders said the market drew momentum from the establishment of several new trust funds that are expected to pump extra liquidity into the Nikkei.
--from staff and wire reports
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