Asia-Pacific markets rally amid HK rebound

Asia-Pacific markets rally amid HK rebound

HONG KONG (AFP): Asian share prices rallied yesterday with some markets making their first gains in the new year, taking heart from Wall Street's resilience and a rebound in Hong Kong.

Indonesian share prices jumped a spectacular 9.1 percent in heavy trade, up 31.900 points at 382.137, with the market buoyed by ongoing talks between the government and the International Monetary fund (IMF).

But one sales director at a Jakarta brokerage urged caution, saying: "Let's see what happens on Thursday when the government announces the results of its discussions with the IMF.

"If there is no major progress, then we are likely to go back to where we started a few days ago."

Hong Kong was also stronger as share prices surged 7.4 percent for the first gain of the new year, rebounding from a steep plunge of 8.7 percent the previous day, on the back of Wall Street's resilience.

Hong Kong dealers said sentiment was still cautious amid fears of further increases in interest rates and possible deterioration in ailing regional markets.

"The market is very oversold, there is no doubt about it. But without regional stability, there is no way we can go anyway further from here," said Eugene Law, research head at Lippo Securities.

The key Hang Seng index gained 598.94 points to close at 8,720.00 following seven consecutive sessions of losses, after Wall Street overnight reversed a sharp early slide and ended higher.

In Shanghai, B shares, nominally reserved for foreign investors, fared better on a stronger Hong Kong market, rebounding from historic lows to close 5.16 percent higher, up 2.12 points at 43.01.

It charted a record intra-day low of 38.40 points, following Monday's nine-percent loss to 40.89 points.

"I think the recovery can be maintained for some time to come. B shares are completely internationalized now," said Daishin Securities analyst Zhao Ya.

Japanese share prices rebounded for the first time in four trading days Tuesday, aided by a recovery in Asian share prices and uninterrupted by a hostage-taking incident at the stock exchange, brokers said.

The key Nikkei stock average of 225 selected issues on the Tokyo Stock Exchange rose 91.50 points to end the session at 14,755.94.

Singapore share prices ended 7.7 percent higher on a technical rebound after seven straight days of sharp falls.

"It was mainly valuations, which have fallen to attractive levels, that encouraged buying," said Lim Jit Soon, research head of UBS Securities Singapore. "The (previous) selling was overdone and irrational."

However, analysts warned the market's rebound was unsustainable.

"Following the market's sharp fall, this rebound is technically expected. We are still overwhelmed by uncertainty in the region. The rebound will be temporary," said a research head with a regional brokerage.

In Kuala Lumpur, Malaysia's key stock index closed 5.5 percent higher on fresh local support amid rebounds in regional bourses and currencies. It gained 26.32 points to 503.89.

One local fund manager said the presence of IMF officials and the United States in the region was seen as "injecting confidence" and signaled that they were steadfastly backing ailing economies like Indonesia.

In Bangkok, the Stock Exchange of Thailand (SET) composite index rallied 2. 9 percent, or 9.79 points, to 348.96, while the SET 50 index climbed 0.98 points to finish at 24.86.

In Seoul, share prices gained 1.6 percent, or 7.54 points, to 463.74, reacting positively to IMF chief Michel Camdessus's display of confidence in the recovery of the economy.

Taiwan shares rebounded 1.9 percent as the Taiwan Stock Exchange weighted price index soared 138.10 points to 7,513.24. Philippine share prices closed 3.8 percent higher, up 58.02 points at 1, 590.99, on bargain-hunting.

Lisa Joson of Amsteel Securities Philippines Inc. said the upturn was due to "bargain hunting because so many stocks have reached oversold conditions" but warned "we cannot attribute it (the upturn) to anything fundamental."

Australian shares rallied 0.9 percent as buyers returned on the strength of better Asian markets and the overnight Wall Street rise.

"We're just back to where we should have been yesterday," Henderson Charlton Jones dealer Scott Emms said.

The Australian Stock Exchange's key barometer, the All Ordinaries index, rose 22.9 points to 2,565.3 with almost all the rise attributable to industrial stocks.

New Zealand shares closed up 0.1 percent, with the NZSE-40 index gaining 1. 69 points to 2,214.52.

In London, stock markets across Europe rallied early on Tuesday with strong performances inspired by Wall Street's resilience against Asian financial turmoil overnight.

In London, the FTSE-100 key index rose 20.9 points to 5,089.7 in early trading, taking its lead from the rally on Wall Street where the Dow Jones brushed aside jitters over plummeting markets in Asia and closed with a gain of 66.76 points to 7,647.18.

Prices surged in Paris, where the CAC-40 index advanced by 1.8 percent to 2,914.09 points.

In Frankfurt, the DAX index also shot up 1.8 percent, at 4,160.25, while in Madrid the Ibex-35 was up 1.4 percent at 7,495.30.