ASIA RALLIESBack to 6?
Asian stocks rally after week of losses
By Leo Lewis in Tokyo
Published: March 6 2007 03:25 | Last updated: March 6 2007 03:25
Markets across Asia staged broad rallies on Tuesday morning as investors refused to let the recent selling frenzy enter a sixth day.
There was strong buying on the Hong Kong and Korean exchanges, with the action in the latter focused on the large electronics and steel names like Samsung and Posco that have been savaged since the Feb 27 plunge.
South Korea’s benchmark Kospi index was up 1.23 per cent to 1,392.8 by late morning, while Hong Kong’s Hang Seng index added 227.22, or 1.2 percent, to 18,892.1 at 10:43am local time.
Brokers said that the markets may have undergone the “shortest, sharpest” correction in recent memory, and said that many of their clients were on Tuesday energetic buyers of stocks whose fundamentals “were just as solid as they were on February 26”.
In Tokyo, the buying was equally broad, with the great majority of stocks in the Nikkei 225 stock average surging strongly in a morning of high-volume trading.
The benchmark Nikkei was in particular boosted by strong gains for Japan’s big exporters, rising 131.73 points to 16,773.98 – a rise of 0.79 per cent at midday. The broader Topix index staged a bigger recovery, jumping 1.16 per cent to 1,682.0.
Exporters, the worst-hit victims of earlier selling, led the rebound. The yen’s sharp rise against the dollar between Friday and Monday’s close saw the greenback dipping to the 115.50 range, but the yen had fallen back to 116.30 by the Tuesday lunch break.
Japan’s exporters, which are about to repatriate dollars earned abroad as the financial year nears its end, are the chief beneficiaries of a weaker yen. Sony shares jumped 3.89 per cent to Y5,880 as the yen slumped back.
Weaker energy prices were taken as an opportunity to buy steel stocks, and there were rallies for Nippon Steel and Kobe Steel. Sumitomo Metal & Mining was among the biggest gainers in the market, with its shares leaping 7.04 per cent to Y2,205.
Nikko Cordial, the scandal hit brokerage, remains the subject of buyout speculation. The company said Tuesday that it would consider a tender offer from Citigroup “favourably”, and the shares leapt 14.09 per cent to Y1,345.
Copyright The Financial Times Limited 2007