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Tech firms push up Asian stocks, but recovery doubts stay

Tech firms push up Asian stocks, but recovery doubts stay
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First Published: Tue, Jul 07 2009. 09 11 PM IST

Stronger currency: An electronic share price board in Tokyo, Japan. The country’s Nikkei index fell 0.3% as a stronger yen hit exporter shares. Kazuhiro Nogi / AFP
Stronger currency: An electronic share price board in Tokyo, Japan. The country’s Nikkei index fell 0.3% as a stronger yen hit exporter shares. Kazuhiro Nogi / AFP
Updated: Tue, Jul 07 2009. 09 11 PM IST
Hong Kong: Asian stocks edged up on Tuesday, struggling after a slide the previous day, while the yen held gains against higher-yielding currencies as investors doubt the speed of the global economy’s recovery.
A bleak US jobs report last week has prompted portfolio managers to reassess how quickly economies around the world can return to growth after the deep recession, spurring a pull-back in shares and currencies such as the Australian dollar.
Stronger currency: An electronic share price board in Tokyo, Japan. The country’s Nikkei index fell 0.3% as a stronger yen hit exporter shares. Kazuhiro Nogi / AFP
“Last week’s US employment numbers were a hint that perhaps the market had become over-optimistic,” said Takahiko Murai, general manager of equities at Nozomi Securities Co. Ltd in Tokyo.
But regional markets have held up as some early news on quarterly earnings showed technology companies faring well.
Taiwan’s benchmark Taiex index gained 1%, thanks to a 3.3% jump in shares of smartphone maker HTC Corp. after the company reported a better -than-expected second quarter (Q2) profit.
South Korea’s Kospi edged up 0.4% after Samsung Electronics Co. Ltd, the world’s top maker of memory chips and flat screen TVs, forecast Q2 earnings well above projections, giving the broader market a boost. Samsung’s shares have risen nearly 8% in the past two days.
The yen held near a five-week peak against the British pound and the New Zealand dollar as market players have cut holdings of currencies that have surged along with stocks. US crude oil prices edged up above $64 (Rs3,104) while gold prices hovered below $930 per ounce (0.45kg). In Japan, investors have poured cash into government bonds on bets that the economy’s recovery from recession will be an extended one that could lead to a long stretch of deflation, pushing benchmark yields to a three-month low.
The MSCI index of Asia-Pacific shares outside Japan edged up about 0.1%.
Japan’s Nikkei share average dipped 0.3% as a stronger yen hit exporter shares, while the Shanghai Composite shed nearly 1% after having reached a 13-month high on Monday.
China’s economic resilience and splurge of bank lending to boost growth has fuelled the 70% rally in the Shanghai Composite so far this year.
Market reaction was limited so far as hundreds of Uighur protesters clashed with Chinese anti-riot police in the capital of China’s Muslim region of Xinjiang on Tuesday, two days after ethnic unrest left 156 dead and nearly 1,000 injured.
Hong Kong shares dropped 0.7% in thin trade.
Indian markets steadied after Monday’s plunge when the government’s big-spending Budget for the fiscal year was viewed as disappointing.
The benchmark 30-share Sensex rose less than a percent after Monday’s near 6% tumble, while the partly convertible rupee inched higher.
But yields on five-year federal bonds jumped to 6.49%, taking the two-day rise to 25 basis points on worries about how the market will absorb the bigger issuance to pay for the spending that will boost the deficit to 6.8% of gross domestic product.
Australian shares fell 0.4% to a fresh five-week closing low as mining firms were knocked down by lower metal prices, though doubts over an economic recovery saw investors buy health and telecom stocks.
The dollar was mostly steady and has held its ground in the past few weeks as riskier assets have stumbled, with the US currency favoured as a haven when market players strike a cautious footing.
The dollar was little changed around 95.30 yen (Rs49.56), while the euro drifted sideways at $1.40.
Shinichi Saoshiro in Tokyo contributed to this story.
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First Published: Tue, Jul 07 2009. 09 11 PM IST
More Topics: Tech firms | Asia | Stocks | Takahiko Murai | US |