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Asian stocks mixed after clawing back heavy morning losses

Asian stocks mixed after clawing back heavy morning losses
AFP
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First Published: Wed, Oct 08 2008. 01 18 AM IST
Updated: Wed, Oct 08 2008. 01 18 AM IST
Hong Kong: Asian shares ended mixed on Tuesday as they clawed back heavy morning losses on optimism for a round of interest rate cuts following a slash in the official figure in Australia. Regional markets plummeted early on after overnight losses in Wall Street and Europe, but Australia’s central bank provided a rare dose of positive news, sparking hopes policymakers in other countries could follow suit.
The Tokyo Stock Exchange’s benchmark Nikkei-225 index briefly tumbled 5%, dropping below 10,000 points for the first time in more than four years on fears that government efforts to end the crisis may be too little, too late. It finally closed down 3.01% at 10,155.90, the lowest closing level since December 2003.
Other markets that started the day on a low also eased back on the news from Australia, where the benchmark S&P/ASX200 finished 1.7% higher at 4,618.7 points, after opening more than 3% down.
The 1 percentage point rate cut was the biggest in Australia since 1992.
Seoul, Singapore and Taipei, which opened lower, managed to end the day in positive territory. Shanghai was 0.73% off, while Hong Kong was closed for a public holiday.
In other Asian markets, Manila ended 3% down and Mumbai fell 0.9%, while Jakarta was 1.8% off after the government hiked interest rates to fight inflation and Kuala Lumpur was flat.
In Tokyo, hopes for an interest rate cut were dashed when the central bank said it would hold its figure at 0.5%. Its governor later played down any moves for a coordinated cut between nations to help ease the financial crisis. The bank did, however, pump an extra 1 trillion yen (Rs47,000 crore) into the market for the 15th straight business day in a bid to keep liquidity.
“The market is still panicky,” Credit Suisse strategist Satoru Ogasawara said on the Japanese market. “Many people are simply dumping shares.”
“We are seeing flight to quality from riskier assets. Some people might be picking up bargains, but there is no telling how long they will hold onto the shares they bought at low prices,” said Ogasawara.
World markets have been erratic over the past few days despite lawmakers in Washington giving the green light to a $700 billion (Rs33.6 trillion) rescue package for the US financial system.
The crisis earlier this week began to take hold in Europe, where European Union ministers were forced into a special session to find a way out of the mess.
The main Chinese index, Shanghai Composite, which covers A and B shares, was down 15.90 points at 2,157.84.
The market opened 2.8% lower, after closing at a four-year low on Monday due to fears over a global economic meltdown.
Chinese Premier Liu Chao-shiuan urged calm among investors and vowed to maintain stability in the local markets.
In South Korea, the Kospi index ended up 7.35 points at 1,366.10.
“They (local funds) seem to be thinking the Kospi may have hit its real bottom” after six consecutive days of losses, Lee Jae-Mahn at Tong Yang Securities, said.
Seoul’s plan to unveil additional measures to stabilize the local stock market also helped ease jitters, analysts said.
In Singapore, the main Straits Times Index gained 9.23 points to 2,177.55.
In Bangkok, Thai share prices closed 4.18% lower, with the the Stock Exchange of Thailand composite index closing at 528.71 points.
In Indonesia, where the central bank raised its benchmark interest rate by a quarter of a percentage point to 9.5%, the benchmark Jakarta Composite Index fell to 1,619.72.
In New Zealand, where the NZX-50 index fell 1.45%, there was speculation that the country’s central bank could follow with a rate cut of the same magnitude as in neighbouring Australia, when it meets later this month.
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First Published: Wed, Oct 08 2008. 01 18 AM IST