Asian stocks likely to rebound
Monday, 10 December 2007
HONG KONG, Dec 9 (Reuters): Asian stocks should push higher in the coming week as investors fret less over the outlook for the US economy, with all eyes on the US Federal Reserve's policy meeting Tuesday where markets are pricing in a quarter-point rate cut.
"To some extent, the 25 basis point rate cut is already priced into the markets, but we're still in the recovery phase for Asian markets after the sharp decline in November," said Hirokazu Yuihama, regional strategist at Daiwa Institute of Research.
Yuihama said rate-sensitive markets such as Hong Kong and Singapore will benefit most from lower US rates, but Taiwan, which is heavily dependent on US demand for its products, may suffer in the next couple of months as the US economy slows.
Korea
Analysts expect the KOSPI to drift sideways after a two-week rebound, with investors holding off taking new positions ahead of the December 19 presidential election and persistent worries about the US economy.
"The recent two-week advance had reflected expectations for a US interest rate cut and government steps on mortgage borrowers, but no one believes the US economy is doing well," said Kim Hak-kyoon, an analyst of Korea Investment & Securities.
Hong Kong
Many analysts are betting Hong Kong's accelerating momentum could put the market above a 30,000 resistance level. Investors are likely to drive shares up before the Fed meeting, they say, then cash in afterwards.
"Quite a lot of news has already been factored in," said Howard Gorges, vice chairman at South China Brokerage. "There could be a bit of profit-taking to be had."
China
The Shanghai Composite Index is likely to hover around current levels, with confidence slowly returning as the market recovers from a drubbing in November.
"The index is establishing a bottom at around 4,800 points but a strong rally is not sustainable," said Zhang Yang, analyst at Oriental Securities Co.
Australia/NZ
Australian shares may extend their uptrend, buoyed by expectations of a US rate cut, though gains are likely to be tentative given persistent uncertainties about the health of the US economy.
"People will soon see that despite the fact the Fed is cutting rates and that the government is promoting remedies to mitigate damage from the sub prime fallout, we're still faced with slower growth in 2008 than people had expected," said Angus Gluskie, portfolio manager at White Funds Management.
Taiwan
Further gains are seen for stocks, although the market is seen capped at the 9,000 level.
"The US market has stabilised from the sub prime turmoil recently. That's certainly positive for Taiwan stocks," said Kevin Li, a vice president of Shin Kong Securities Investment with T$60 billion ($1.9 billion) client assets under management.
Regional stock markets are set to remain supported with investors comforted by US moves to address the housing problems and ahead of the Fed's rate decision.
"To some extent, the 25 basis point rate cut is already priced into the markets, but we're still in the recovery phase for Asian markets after the sharp decline in November," said Hirokazu Yuihama, regional strategist at Daiwa Institute of Research.
Yuihama said rate-sensitive markets such as Hong Kong and Singapore will benefit most from lower US rates, but Taiwan, which is heavily dependent on US demand for its products, may suffer in the next couple of months as the US economy slows.
Korea
Analysts expect the KOSPI to drift sideways after a two-week rebound, with investors holding off taking new positions ahead of the December 19 presidential election and persistent worries about the US economy.
"The recent two-week advance had reflected expectations for a US interest rate cut and government steps on mortgage borrowers, but no one believes the US economy is doing well," said Kim Hak-kyoon, an analyst of Korea Investment & Securities.
Hong Kong
Many analysts are betting Hong Kong's accelerating momentum could put the market above a 30,000 resistance level. Investors are likely to drive shares up before the Fed meeting, they say, then cash in afterwards.
"Quite a lot of news has already been factored in," said Howard Gorges, vice chairman at South China Brokerage. "There could be a bit of profit-taking to be had."
China
The Shanghai Composite Index is likely to hover around current levels, with confidence slowly returning as the market recovers from a drubbing in November.
"The index is establishing a bottom at around 4,800 points but a strong rally is not sustainable," said Zhang Yang, analyst at Oriental Securities Co.
Australia/NZ
Australian shares may extend their uptrend, buoyed by expectations of a US rate cut, though gains are likely to be tentative given persistent uncertainties about the health of the US economy.
"People will soon see that despite the fact the Fed is cutting rates and that the government is promoting remedies to mitigate damage from the sub prime fallout, we're still faced with slower growth in 2008 than people had expected," said Angus Gluskie, portfolio manager at White Funds Management.
Taiwan
Further gains are seen for stocks, although the market is seen capped at the 9,000 level.
"The US market has stabilised from the sub prime turmoil recently. That's certainly positive for Taiwan stocks," said Kevin Li, a vice president of Shin Kong Securities Investment with T$60 billion ($1.9 billion) client assets under management.
Regional stock markets are set to remain supported with investors comforted by US moves to address the housing problems and ahead of the Fed's rate decision.