Positive patterns: Asian stocks continue to soar

Positive patterns: Asian stocks continue to soar
AP
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First Published: Fri, Oct 12 2007. 01 45 AM IST
Updated: Fri, Oct 12 2007. 01 45 AM IST
Bangkok: Asian markets rose on Thursday, with record closes again in China, Hong Kong, India and other markets across the region despite the Wednesday overnight decline on Wall Street.
Hong Kong shares rallied for a third straight session. The blue-chip Hang Seng Index rose 1.97% to 29,133.02, surpassing the 29,000 level for the first time. Analysts said while Hong Kong’s benchmark index may test the 30,000 level soon, volatility is likely to increase in the short term as share prices have become increasingly detached from fundamentals.
“Given the Hang Seng Index’s current price-to-earnings ratio at 21 times, I don’t think it is reasonable to buy anything based on fundamentals,” said Castor Pang, strategist at Sun Hung Kai Securities Ltd.
China Petroleum & Chemical Corp., better known as Sinopec, was the biggest blue- chip gainer. Asia’s largest refiner by capacity rose 11.39% to HK$11.34 (Rs57.49) after Sinopec said regular maintenance on a crude distillation unit will finish by the end of the month.
China’s benchmark Shanghai Composite Index rose 2.5% to close at 5,913.23—its fourth record close in a row this week. Coal mining company China Shenhua Energy Co.’s shares rose by the 10% daily limit to 83.85 yuan (Rs437.37). Sinopec, listed domestically in Shanghai as well as in Hong Kong, also jumped 10%, to 21.75 yuan.
“It was blue chips’ day today, with institutional investors very obviously driving the rally,” said Li Xianming, an analyst with Orient Securities Co. “They’re enamoured by the sector’s strong earnings story and scared off by the high valuations of small and mid-size stocks.” Indian shares continued to rise, hitting another record close, led by gains in stocks of Oil and Natural Gas Corp. and automobile companies. The Bombay Stock Exchange’s 30-share Sensex rose 0.8% to 18,814. The Sensex first surged past the 18,000 mark on Tuesday.
Meanwhile, in Tokyo, Japanese stocks jumped to their highest in two-and-a-half months.
The Nikkei Stock Average of 225 issues rose 1.64% to close at 17,458.98 on the Tokyo Stock Exchange—the index’s highest close since 26 July.
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First Published: Fri, Oct 12 2007. 01 45 AM IST