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Tokyo lifted as yen weakens
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March 3, 1999: 5:17 a.m. ET
Nikkei breaks back through the 14,000 level as HK reacts cautiously to budget
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LONDON (CNNfn) - Tokyo stocks staged a comeback Wednesday, making up some of their losses from recent sessions. The improved mood helped lift the blue-chip index back above the 14,000 mark. Hong Kong was subdued, as investors pondered the implications of the budget.
The majority of the region's markets lifted at least some of the gloom that had affected investors Tuesday, with all but four making headway of some sort.
The Nikkei 225 ended the day strongly, closing 249.30 points higher at 14,170.36, a rise of 1.79 percent. Investors shrugged off overnight losses on Wall Street as confidence was bolstered by the dollar firming against the yen and a slide in interest rates. Positive news flow also helped as traders set about bargain hunting, after Tuesday's losses.
"The Nikkei 225 reversed yesterday's losses as the dollar climbed and domestic interest rates fell," Noriko Irie, market economist at Fuji Securities told Reuters. The yield on the key 10-year Japanese government bond dropped to 1.690 percent from 1.805 percent, while the dollar put on around 2 yen to trade around 121 yen in Tokyo.
Sony Corp. and Sony Music were among the best blue-chip performers, adding 4.37 percent and 4.27 percent respectively, to close at 9,070 and 6,590 yen. The stocks were bolstered by Tuesday's announcement that affiliate Sony Computer Entertainment planned to launch the successor to its popular Playstation video game console by March 2000.
Petrochemical engineer Chiyoda also made strong gains, closing up 3.7 percent at 280 yen on reports Kellogg, Brown & Root of the U.S. was eyeing an equity stake, according to Reuters. At one point the shares were up over 6 percent.
Nissan Motor Co. continued to benefit from its announcement Monday that it would consolidate parts purchasing at its two North American operations. Renault's assertion that it was still looking to buy part of the car maker also helped buoy the shares, which closed up 2.78 percent at 480 yen.
In Hong Kong, traders turned cautious as the government unveiled in its budget that it would sell a large part of its stock portfolio.
Financial Secretary Donald Tsang revealed GDP was expected to grow by 0.5 percent this year compared to a 5 percent shrinkage in 1998. He also confirmed the government was in talks with Walt Disney to site a new theme park in the territory, while announcing plans to privatize the local transport system.
Initial reactions to the budget were mixed. "This is a very positive budget so far," Adrian Ngan, head of research at BNP Prime Peregrine, told Reuters.
Andrew To, director at Ta Fook Securities begged to differ. "The budget is neutral for the Hong Kong economy, but bad for the market," he told Reuters.
The Hang Seng index weakened in late trading, giving up some significant early gains to reach 9,922.40, up just 8.82 points.
Lackluster trading in Singapore left the Straits Times index little changed. The blue-chip average reversed earlier marginal gains to close down 0.2 percent at 1,415.81.
In Sydney, leading shares ended the day in negative territory after a dull session. The All Ordinaries index was down 0.1 percent at 2,889.9.
Topsy-turvy trading in Seoul ended with the Kospi index closing up 0.1 percent at 534.49, after financial stocks helped lift the index in late trading.
Both Taiwan and Philippine blue chips ended the day higher. Taipei's Weighted index closed up 2.23 percent at 6,403.14, while Manila's leading shares finished up 1.96 percent higher at 2,008.92.
In the other smaller markets trading was mixed. In Kuala Lumpur, the main index gave up 2.43 percent to close at 513.23, while Thailand's Set recovered slightly, ending the day barely changed at 338.52. In Jakarta, the blue chips closed up slightly, 0.21 percent higher at 395.807.
-- from staff and wire reports
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