Asian bourses record gains

Asian bourses record gains
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First Published: Wed, Apr 16 2008. 12 21 PM IST
Updated: Wed, Apr 16 2008. 12 21 PM IST
Singapore: Asian stocks scored solid gains on Wednesday, with high-tech exporters buoyed by a reassuring outlook from top chipmaker Intel Corp and energy shares underpinned by record high oil prices.
Financial stocks also climbed after several U.S. regional banks’ quarterly results beat forecasts, suggesting it was not all doom and gloom in a sector roiled by the U.S. mortgage market meltdown and the global credit crunch.
European shares were expected to track their U.S. and Asian peers, with financial bookmakers expecting major markets in London, Frankfurt and Paris to open between 0.9% - 1.2% higher. “There is more confidence in the market and people are perceiving that there is a little more value,” said Robert Hook, portfolio manager at Australian firm SG Hiscock & Co.
The battered U.S. dollar held ground against the euro clinging to gains made after surprisingly strong U.S. price and manufacturing data suggested the Federal Reserve may be less aggressive in cutting interest rates than earlier thought. But it eased against the yen, reflecting caution ahead of quarterly results from top Wall Street names such as JPMorgan Chase, Merrill Lynch and Citigroup, heightened by a report of more write-downs at Merrill.
Intel Boost
On Tuesday, leading U.S. regional banks, including U.S. Bancorp and Regions Financial Corp, beat expectations with first-quarter profits and expressed confidence they could withstand rising credit losses.
Investor sentiment was also lifted after Intel, the world’s largest maker of semiconductors, affirmed its 2008 profit margin target, reassuring investors concerned about the impact of a weak U.S. economy.
Japan’s Nikkei average advanced 1.2%, led by high-tech exporters such as Sony Corp, with financial stocks, including sector leader Mitsubishi UFJ Financial Group, also gaining.
The MSCI’s measure of Asia Pacific stocks outside Japan rose 1% by 0600 GMT, building on Tuesday’s modest 0.5% gain, though the index is still down almost 11% so far this year.
Taiwan led the region, closing 1.6% higher while Hong Kong stocks lagged, up 0.7% at the midsession.
Asia’s energy and resource stocks were among the top gainers, benefiting from high oil prices.
Analysts said a Wall Street Journal report saying Merrill Lynch would announce $6-$8 billion of asset write-downs had limited impact, although it did exert some pressure on the dollar and some banks in the region trimmed gains.
“Anything negative is just going to affect the financial stocks, that’s for sure,” said Lucinda Chan, division director at Macquarie Equities in Sydney. “But the news doesn’t take me by surprise and that is why people are not totally giving up. Everyone’s in a bit of standstill.”
Markets welcomed even recent dismal earnings from some major banks as a sign that they were scrubbing their books clean and putting the credit crunch behind them.
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First Published: Wed, Apr 16 2008. 12 21 PM IST
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