Asian stocks seen nervous, volatile

Asian stocks seen nervous, volatile

HONG KONG (Reuters): Asian stocks braced for another week of extreme volatility, with concern that instability in other world markets could put further pressure on the region's wildly fluctuating exchanges.

Indonesia's huge assistance package engineered by the International Monetary Fund -- estimated at up to US$40 billion by some analysts -- was expected to offer a hint of stability to the region, which remains unnerved by events in Thailand and vulnerable to market gyrations on Wall Street.

The Dow Industrials ended one of its most turbulent weeks in history with a gain of 60.41 points or 0.82 percent on Friday, closing at 7224.08.

But any reassurance from New York will be countered by further losses in Bangkok, where the IMF continues to work with politicians on meeting the terms of a US$17.2 billion package agreed last August.

All Asian markets ended the week on a nervous note. Most were poised for more volatility and probable losses, including the two biggest markets, Tokyo and Hong Kong.

The only markets expecting some improvement were Singapore, where blue chips were touted as oversold and Seoul, where margin loans were falling. Taipei also hoped for a bounce.

More stable conditions surfaced in Sydney, but they were considered unconvincing against the unsettled global backdrop. Regional dealers in Hong Kong said liquidity remained thin, aggravating market volatility. Net regional outflows persisted, although foreign outflows from Hong Kong had slowed.

Tokyo: Worried by a lack of energy in Japan's domestic economy, market participants in Tokyo will remain nervous about lingering turmoil on stock markets around the world, investors and analysts said.

Some said the benchmark Nikkei average is likely to slip through the next key psychological support line of 16,000 some time this week.

"Stocks will keep on swinging wildly overseas this week, and the Tokyo market will be affected by that," said Keiko Kondo, a strategist at Merrill Lynch Japan Inc.

On Friday, the 225-share Nikkei average gained 94.00 points, or 0.57 percent, to close at 16,458.94. The average ended the week 904.8 points lower, losing 5.21 percent on the week.

The market will be closed on Monday for a national holiday.

Hong Kong: Hong Kong's blue chips are expected to remain volatile in the coming week, although red chips and H shares may see some gains, analysts said.

"The market is seen still volatile with a range of about 10,000 to 11,000," said Ben Kwong, director of research at Dharmala Securities.

The blue chip Hang Seng index rose 260.92 points, or 2.52 percent, to close at 10,623.78 on Friday. It lost 520.56 points, or 4.67 percent, during the week.

Kuala Lumpur: Overseas markets would dictate direction next week and deflect attention from local issues, analysts said.

"Next week's market depends on Hong Kong and Wall Street. The market is looking for leads from overseas markets," said Ooi Soon Beng, head of research at Inter-Pacific Capital.

For the week, the Kuala Lumpur Stock Exchange (KLSE) Composite Index of 100 large-capitalized stocks closed 27.70 points, or 4.0 percent, lower from Friday a week ago.

On Friday, the index closed at 664.69 points, up 2.21 points from Wednesday's close. The market was closed on Thursday for a Hindu festival.

Bangkok: Battered Thai stocks are expected to lose more ground next week on a variety of negative factors including a plunging baht, poor corporate third quarter earnings results and local political uncertainty, brokers said.

Uncertainty surrounding the US$17.2 billion aid package put together by the International Monetary Fund would also weigh on sentiment. An IMF team is now in Bangkok to review the progress of the Thai government in meeting aid conditions.

The Stock Exchange of Thailand (SET) index retreated 9.47 percent in the week to 447.21 points on Friday from a week ago, depressed by the baht which hit a record low of 41.20 against the dollar in the onshore market early on Friday.

"What was an initial bout of sickness has become an epidemic," said Barry Yates of Seamico Securities.

Manila: Philippine shares, unnerved by the setbacks on Wall Street and regional markets, are seen tumbling further next week on more unfavorable third quarter company earnings and a rise in the October inflation rate, traders said.

"People are unlikely to stay long-term in this market and next week they will take trading stances. We will see more volatility," said Michael Julian, trader at Paribas Asia Equity.

The key stock market index ended 4.93 points higher on Friday at 1,818.09 but it lost 1.6 percent on the week. The index closed last Friday at 1,847.78 points.

Singapore: Singapore dealers said funds were returning to blue chips on the view they were oversold.

"Some houses have been pushing investors toward blue chips, saying earnings growth doesn't justify the prices where they're trading," a Japanese brokerage dealer said.

On Friday, the Straits Times Industrials Index (STII) ended at 1,586.07, up 2.9 percent compared with a week ago when the index closed at 1,617.81.

In Seoul: Seoul stocks are likely to rebound next week, boosted by falling margin loans and rising customer deposits, but volatile financial markets would continue to weigh on long-term sentiment, brokers said.

"We would most likely see an up-down-up movement next week, but won/dollar rate and overseas market trends will continue to affect (us)," said Jun Yong-hee of Hyundai Securities. Brokers also said heavy foreign sales would also limit the expected stock market rebound.

The composite index closed at 497.22 on Saturday, down 9.34 percent or 51.25 points from last Saturday's 548.47.

Sydney: Australia's stock market ended the week on a firm note despite the Dow's wobble on Thursday night, but brokers remain wary of any talk the market has settled.

"I think we will see more of this volatility with all eyes on Hong Kong and New York waiting for things to calm down," said Henderson Charlton Jones dealer Phillip Toop. "No-one is saying we are out of the woods just yet," he said.

The All Ordinaries index ended at 2464.8 on Friday, up 1.18 percent on the day, but down 3.7 percent over the week.

Wellington: New Zealand brokers heaved a sigh of relief as the share market closed 0.8-percent higher on Friday, but brokers said the storm clouds had not dissipated yet.

Wall Street would remain the defining force but brokers said the New Zealand market was fundamentally well-placed.

The top-40 ended at 2,355.83, 113.92 points or 4.61 percent below last Friday's close and 279.65 points or 10.6 percent under its 10-year peak, hit on Wednesday last week.