Asian stocks extend gains
Wednesday, 22 August 2007
HONG KONG, Aug 21 (Reuters): Asian stocks extended gains Tuesday as credit concerns eased and a softer yen buoyed Japanese exporters, while a move by China to let residents invest directly in Hong Kong securities gave the Hang Seng Index a boost.
Investor confidence was slowly recovering after the US Federal Reserve sought to calm markets by slashing a key US bank lending rate Friday, although concerns about a global credit shortage continued to linger.
The latest to get hit by the US mortgage crisis was Capital One Financial Corp, which said it would cut 1,900 jobs and shut down a wholesale mortgage unit.
"Even though we saw strong gains yesterday, there is still lingering concern about the impact from the US subprime issue to the US economy. We'll still see high volatility," said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities in South Korea.
After a wobbly start, MSCI's measure of Asia Pacific stocks excluding Japan rose 2 per cent by 10:21 p.m. EDT, extending Monday's 6 per cent surge -- its biggest one-day per centage gain since September 1998.
Tokyo's Nikkei average was up 1.5 per cent by the end of morning trade, adding to Monday's 3 per cent rise, as investors bought exporters such as Sony Corp. and Canon Inc. following declines in the yen Monday.
"The Tokyo market is getting back to normal as shares that should be bought are being bought and shares that should be sold are sold, in contrast to the across-the-board selloff or buying of stocks seen in recent sessions," said Tsuyoshi Segawa, an equity strategist at Shinko Securities.
Hong Kong's Hang Seng Index advanced 4.5 per cent after China permitted residents in the northern port city of Tianjin to invest directly in Hong Kong-listed securities under a pilot program aimed at encouraging money to flow out of the country.
"Although this is a test program, it is effectively allowing all residents to invest in Hong Kong," said Conita Hung, head of equity markets at Delta Asia Financial Group.
China stocks listed in Hong Kong, or H shares, surged 7 per cent, while China mainland stocks also rose, pushing the Shanghai Composite Index to a fresh life high.
Other major markets in the region were all up between 0.2 per cent and 2 per cent. Philippines stocks jumped 8.7 per cent, playing catch up to regional gains after a holiday Monday.
After extending losses broadly Monday, the yen found a tentative footing in early Asian trading. The fall has reversed some of the yen's recent rally, sparked by a drop in risk appetite that prompted an unwind in carry trades.
Investor confidence was slowly recovering after the US Federal Reserve sought to calm markets by slashing a key US bank lending rate Friday, although concerns about a global credit shortage continued to linger.
The latest to get hit by the US mortgage crisis was Capital One Financial Corp, which said it would cut 1,900 jobs and shut down a wholesale mortgage unit.
"Even though we saw strong gains yesterday, there is still lingering concern about the impact from the US subprime issue to the US economy. We'll still see high volatility," said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities in South Korea.
After a wobbly start, MSCI's measure of Asia Pacific stocks excluding Japan rose 2 per cent by 10:21 p.m. EDT, extending Monday's 6 per cent surge -- its biggest one-day per centage gain since September 1998.
Tokyo's Nikkei average was up 1.5 per cent by the end of morning trade, adding to Monday's 3 per cent rise, as investors bought exporters such as Sony Corp. and Canon Inc. following declines in the yen Monday.
"The Tokyo market is getting back to normal as shares that should be bought are being bought and shares that should be sold are sold, in contrast to the across-the-board selloff or buying of stocks seen in recent sessions," said Tsuyoshi Segawa, an equity strategist at Shinko Securities.
Hong Kong's Hang Seng Index advanced 4.5 per cent after China permitted residents in the northern port city of Tianjin to invest directly in Hong Kong-listed securities under a pilot program aimed at encouraging money to flow out of the country.
"Although this is a test program, it is effectively allowing all residents to invest in Hong Kong," said Conita Hung, head of equity markets at Delta Asia Financial Group.
China stocks listed in Hong Kong, or H shares, surged 7 per cent, while China mainland stocks also rose, pushing the Shanghai Composite Index to a fresh life high.
Other major markets in the region were all up between 0.2 per cent and 2 per cent. Philippines stocks jumped 8.7 per cent, playing catch up to regional gains after a holiday Monday.
After extending losses broadly Monday, the yen found a tentative footing in early Asian trading. The fall has reversed some of the yen's recent rally, sparked by a drop in risk appetite that prompted an unwind in carry trades.