Asian markets rally on hopes for RI, Japan

Asian markets rally on hopes for RI, Japan

SINGAPORE (Reuters): Signs that the economies of Indonesia and
Japan are about to get an overdue boost spurred Asian markets to
some strong gains yesterday , but traders remained wary ahead of
concrete steps in both countries.

Japan's key stock index jumped nearly three percent on hopes
the government would yield to mounting pressure for tax cuts
after the passage of its budget later on Wednesday.

Indonesian markets had a false start after the announcement of
details of the government's latest agreement with the IMF was put
off to Thursday. But the market reacted warmly to news that a
deal on a new package of economic reforms and targets had been
struck.

Elsewhere, Hong Kong stocks were led sharply higher by index
major HSBC Holdings, and Thai shares leapt 3.32 percent. South
Korean stocks edged down, but regional currencies made steady
gains, helped by the Indonesia package and a weaker dollar/yen.

The key 225-share Nikkei average closed up 397.90 points, or
2.49 percent, at 16,376.62. The yen firmed to 133 to the dollar
from around 133.50.

Despite the delayed announcement in Jakarta and the assumption
of a 4.0 percent GDP fall, traders said the fact a deal had been
reached was good news. They said it should pave the way for the
release of billions of delayed bail-out dollars from the IMF and
other international bodies.

The JSX composite index closed up 3.9 points, or 0.74 percent,
at 530.04 points. The rupiah moved firmed to around 8,400 to the
dollar.

"The stock market has largely reacted positively to the news,
but it's likely to be cautious optimism as players would wait for
tangible results," said Charles Phoa, analyst with PT DBS
Securities in Jakarta.

But other were skeptical.

"We cannot trade on this," said one senior dealer at a major
Japanese bank, adding the market would rather focus on a key
creditors' meeting on Indonesia's private debt in New York on
April 15.

The Hang Seng Index surged 265.03 points, or 2.40 percent, to
end at 11,314.46 after a high of 11,429.82.

"If you look at the market today, turnover is not very strong
and all focus is now on Hongkong Bank (HSBC Holdings)," said
Kelvin Tang, analyst at ImPac Asset Management.

Sentiment was also helped by market moves in Japan and
Indonesia and by lower local interbank rates, brokers said.

Despite continued foreign buying encouraged by the country's
first sovereign bond offering in New York, the Korea Stock
Exchange composite index closed down 0.88 percent, or 4.05
points, at 455.53. The won edged higher against the dollar,
eying the 1,400 level.

Bangkok shares ended a bleak 10-day losing streak and moved
sharply higher. Brokers put the rise down to a technical rebound,
saying many stocks in the banking, energy and finance sectors
looked cheap at their current levels.

The composite SET index closed 14.29 points higher at 444.33.

Philippine shares also gained ground, helped by the regional
mood, but trade was light. The main index rose 10.12 points to
settle at 2,193.47.

Shares in Singapore moved smartly higher, but dealers said
trading had been volatile and cautioned the gains could evaporate
just as quickly.

"I don't think the rises look real," said a dealer with an
Asian institution, adding the market remained concerned over the
health of Malaysian financial system.

Malaysian stocks edged higher by the close, prevented from
following other markets higher by steady foreign selling, dealers
said. The benchmark Composite Index closed 0.51 of a point higher
at 664.28 after dipping to a low of 657.08.

Markets in Taiwan were also subdued, the main index falling a
fraction to 9,263.44.

European stock markets stayed lower in midsession yesterday
with only Amsterdam and Brussels among the majors showing a
cautious advance on good company results.

Most of the others, reacting to the Dow's overnight retreat
from the 9000 level and ignoring gains to major indices in Asia,
were content to freewheel in low volume ahead of today's Japanese
budget, an upcoming G-7 meeting and the long Easter break.

The UK's FTSE 100 index slid nearly one percent in morning
trade but had perked up to little more than half that by
midsession.

Technical analysts were still bullish, predicting that the
FTSE would not break below its 10-day moving average at around
6000 and would revive in the short-term to around 6130.

Germany's DAX index was hardest hit during the morning, with
floor trade dipping nearly two percent and the electronic Xetra-
DAX following it down later, also on the Dow's weaker close and
profit-taking after its recent record run.

U.S. stocks in London were subdued in what traders identified
as pre-Easter apathy.