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Japan snaps losing streak
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July 28, 1999: 5:57 a.m. ET
Solid gains on Wall St. drive Asian markets higher; techs rally in Tokyo
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LONDON (CNNfn) - Japanese traders put a six-session losing streak behind them Wednesday after a rally in U.S. markets juiced up buying interest in high-tech exporters. The blue chip Nikkei edged up 117 points, pulling Hong Kong, Singapore, Seoul and Australia along with it.
In Tokyo, the benchmark Nikkei 225 average closed up 0.67 percent, or 117.19 points at 17,579.91, offering a mirror image of the scenarios just a day before, when yen strength and U.S. market jitters sparked a flight out of blue chip manufacturers and technology heavyweights.
Wednesday's run-up was underpinned by a resurgent high tech-sector after overnight gains in U.S. blue-chips such as Microsoft (MSFT), Intel (INTC) andCisco Systems (CSCO) on the Nasdaq index, which jumped 2.3 percent.
On Wall Street, bargain hunting resumed in earnest after a protracted slump triggered by Federal Reserve chief Alan Greenspan's vow last week to stand vigil for the slightest sign of inflation in the U.S. economy. The Dow Jones industrial average soared 115.88 points, or 1.1 percent, to 10,979.04.
The yen remained firm in Tokyo Wednesday, quoted at around 116 to the dollar. The yen's recent strength against the dollar has raised the hackles of exporters who fear the consequences of an unfavorable exchange rate.
A parade of technology giants were among the leading gainers. Traders said they felt a recent correction on the Nikkei was winding to an end.
Shares of computer maker Fujitsu sprinted 11.15 percent to 3,190 yen after Nikko Salomon Smith Barney raised its rating for the company. Sony Corp. gained 1.82 percent to 14,020 yen, Sharp added 3.66 percent to 1,585 yen, NEC rose 4.47 percent to 1,778 yen, and Toshiba added 4.19 percent to 896 yen.
Nissan Motor Corp. surged 11.67 percent to 689 yen, after a Japanese business daily reported plans by the carmaker and French partner Renault to procure auto parts and material in Europe as part of a cost-cutting measure.
Shining banks prod HK higher
Hong Kong shares emerged 0.5 percent higher from a see-saw session punctuated by futures-linked trade. The Hang Seng index added 65.33 points to 13,140.42 on volume of HK$6.81 billion.
Banks shined a day after Bank of East Asia pleasantly surprised analysts with a 3.7 percent first-half profit rise achieved despite mounting bad-loan provisions for troubled Chinese enterprises. BEA reported net profit of HK$676.89 million, topping analysts' expectations of between HK$300 million and HK$500 million.
BEA shares jumped 3.8 percent to HK$18.90 Wednesday, while Hang Seng Bank advanced 2.45 percent to HK$83.50 and Wing Hang Bank gained 4.76 percent to HK$29.70. HSBC Holdings held steady at HK$91.25. Hang Seng and HSBC are scheduled to report earnings on August 2.
Despite the gains, traders characterized the mood as one of caution as local interest rates remained high.
"The local market just follows overseas stocks in rebounding, and the positive BEA results fanned hopes that other banks will also perform above expectations," Alan Pau, associate director at South China Securities, told Reuters.
Singapore's Straits Times Index ended up 3.91 percent at 2,077.65, pushed higher by property stocks. Sector heavyweight DBS Land posted a 174 percent surge in earnings.
In Australia, the All Ordinaries closed up 0.22 percent, or 6.7 points, to 3,059.8 in a modest climb undercut by weakness in mining company BHP and Rupert Murdoch's media group, News Corp. A local dealer told Reuters investors appeared to shrug off domestic inflation data released Wednesday. The consumer price index and underlying inflation both rose 0.4 percent for the quarter, just shy of forecasts for a 0.5 percent rise for both indicators.
In Seoul, the Kospi jumped 1.68 percent to close at 944.46 by late afternoon as the market cheered Wall Street's gains and discounted problems at the Daewoo Group. Earlier this week Daewoo secured a $3.3 billion cash infusion from creditors, enabling it to avert liquidation.
Philippine shares enjoyed a technical rebound, rising 3.97 percent to finish at 2,352.97 after being hammered Tuesday amid U.S. rate concerns. Wall Street's bullish performance and mild interest from overseas funds pushed Taiwan shares on the weighted index 1.58 percent higher, to 7,484.50.
Jakarta stocks shot up 4.54 percent to end at 599.257, while Thai shares climbed 0.92 percent to 461.91 by the close and Kuala Lumpur, the lone loser of the region, gave up 1.74 percent to 782.38.
--from staff and wire reports
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