SINGAPORE (Thomson Financial) - (Updates with closing figures throughout)
Stock markets across Asia ended mostly higher Thursday, tracking gains on Wall
Street overnight as investors focused on the Federal Reserve's apparent
commitment to further interest rate cuts in the minutes from its latest meeting
and shrugged off, for now at least, its warning about high inflation.
The Fed minutes showed policymakers worried that downside risk to growth
remained even after their aggressive 125 basis points of rate cuts in January.
Investors have fretted that inflationary pressure stemming from the latest
spike in oil prices may prevent the Fed from cutting rates again to help revive
the world's largest economy. Oil set a fresh record above 101 dollars a barrel
in Asian trade Thursday. Oil's steep ascent has spurred a broader
commodities rally with gold climbing to a record above 949 dollars an ounce in
New York overnight.
"There was a string of bad news in the US overnight, including inflation
indicators and a lacklustre reading on home construction, but Wall Street
focused on the bright side -- that is more interest rate cuts," said Kwak
Joong-Bo, analyst at Hana Daetoo Securities in Seoul.
The Nikkei closed up 2.8 percent to 13,668.28 and the Topix was up 2.5
percent at 1,334.72. Resource stocks, including Inpex and Nippon Steel rallied
with commodity prices, while exporters, including construction machinery-maker
Komatsu and office equipment and digital camera maker Canon gained on a slightly
weaker yen.
"Investors regained their equilibrium after the shock of the news about
KKR's repayment delay and, naturally, they sought bargains," said Fumiyuki
Nakanishi, chief strategist at SMBC Friend Securities.
The S&P/ASX 200 closed up 1.6 percent to 5,583.4 and the All Ordinaries was
up 1.5 percent at 5,663 as a slew of mainly positive earnings reports offset
continued weakness in the financial sector. Shares of telecommunications giant
Telstra and Qantas Airways rose after their profit beat expectations.
"Whenever companies surprise on the upside they are met with a collective
sigh of relief," said Joe Youssef, a private client advisor at Macquarie Wealth
Management.
The Hang Seng closed up 0.1 percent to 23,623, the Kospi closed up 1 percent
at 1,704.36 and the Taiwanese Taiex was up 2.4 percent to 8,085.93. The Indian
Sensex provisionally closed up 0.86 percent at 17,913.39.
But the Shanghai Composite stumbled on concerns about fresh supply after
Shanghai Pudong Development Bank said it plans to offer new shares. The bank's
shares slumped 10 percent on Wednesday amid talk in the market that it could
issue 1 billion shares, raising about 40 billion yuan.
The index closed down 0.87 percent at 4,527.18.
Singapore's Straits Times Index closed up 0.9 percent at 3,054.81, while
Malaysia's Kuala Lumpur Composite Index closed down 1.4 percent at 1,394.76. The
Jakarta index closed up 1.7 percent at 2,734.21 whereas the Manila composite
index inched down 0.2 percent to close at 3,176.06.
Rate hopes revived
The Dow Jones Industrial Average closed up 0.7 percent at 12,417.26
overnight, after swinging into positive territory in the final hour of trade
following the release of the Fed minutes.
The index had fallen sharply early in the session after data showed consumer
prices rose an unexpectedly high 0.4 percent in January, while core CPI, which
strips out food and energy prices, rose 0.3 percent. That's the highest rise in
a single month since June 2006.
In the latest housing data, construction of new homes managed a small gain
in January, but building permits fell by 3 percent to their lowest level since
Nov. 1991.
In corporate news, networker 3Com shares fell 20 percent after it revealed
that national security concerns could scupper its agreed sale to Bain Capital
Partners and Huawei Technologies. The latter company, the largest networker in
China, has links to the mainland's Communist government.
Electronics retailer Sharper Image filed for bankruptcy after struggling
with flagging sales, sending its shares down more than 75 percent at their worst
level.
Traders said the continued cloudy market outlook could create a strong
incentive for investors in Asian markets to pare back gains later in the
session.
"There are not many fresh trading leads... and the market just rebounded
moderately from yesterday losses, with weak momentum. I don't expect a sharp
movement today," said Ben Kwong, chief operating officer at KGI Securities in
Hong Kong.
Resource stocks rose across the region with the rally in oil and metals
prices.
In Tokyo, Nippon Oil was up 4 percent at 730 yen. Nippon Mining added 5.7
percent to 668 yen, while Sumitomo Metal Mining rose 15.3 percent to 2,175 yen.
In Hong Kong, Cnooc was up 1.56 percent at 12.98 dollars and Petrochina rose
1.37 percent to 11.86.
In Australia, Telstra finished up 2.1 percent to 4.79 Australian dollars
after it reported a 13 percent rise in first-half net profit to 1.9 billion
dollars, beating market expectations for a profit of 1.7 billion dollars.
Qantas Airways rose 2.3 percent to 4.45 dollars after beating expectations
by more than doubling first-half net profit to 617.6 million dollars.
Investment group Babcock & Brown gained 9.3 percent to 16.76 dollars after
beating expectations with a 70 percent rise in annual net profit to 525.1
million dollars and expressing confidence about further growth. The company said
turmoil in credit markets had presented opportunities which could be exploited
because of a strong balance sheet.
Australia's third-largest oil company Santos fell 9 percent to 13.05 dollars
after it said 2007 net profit fell 31.5 percent due to falling production from
mature fields.
Elsewhere, SK Telecom, South Korea's largest mobile operator, rose 4.1
percent to 202,000 won as investors cheered expected synergies from its
successful acquisition of fixed-line operator Hanaro Telecom Inc.
The South Korean government on Wednesday approved SK Telecom's
1.09-trillion-won stake.
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