Asian stocks mixed as global rally loses steam
Thursday, 23 August 2007
TOKYO, Aug 22 (Internet) : Asian stock markets got off to a mixed start Wednesday with Tokyo lower in early deals as a global rally showed signs of losing momentum amid continued nervousness about US mortgage problems.
Investors took a breather after recent gains although many of the region's bourses managed to notch up further modest gains amid hope that the worst of the recent turmoil on world markets has abated.
Now the focus is on what the US Federal Reserve's next move will be to ease credit fears and to restore market stability, with many market players hoping for a cut in the key Fed funds target rate to restore confidence.
The region was also digesting an announcement late Tuesday from China's central bank that it would raise interest rates for the fourth time this year in a bid to rein in mounting inflation and cool the domestic economy.
Japanese investors were cautious ahead of an interest rate decision by the Bank of Japan on Thursday, although recent market turbulence is expected to deter the central bank from raising its super-low rates from 0.5 per cent yet.
But with world markets enjoying a spell of relative calm after last week's rollercoaster ride, analysts were optimistic that stocks can extend a rebound.
"I think the selloff is a buying opportunity and I expect markets to recover their composure and move higher," said Adrian Mowat, chief Asian equity strategist at JP Morgan Securities in Hong Kong.
He said Asian markets should regain levels seen before the recent sharp falls triggered by fears of a credit crunch, although it might take several months with the potential for more losses in the meantime.
"I think we've probably seen the worst but I'm sure there will be more negative newsflow out, particularly from US credit markets," he said.
Japanese shares opened lower as investors locked in some of their recent gains, awaiting Thursday's interest rate decision and press conference from BoJ governor Toshihiko Fukui, with the Nikkei-225 index down 0.18 per cent by lunch.
Hong Kong opened 1.0 per cent higher as investors there continued to take heart from the recent announcement that mainland Chinese will be able to invest directly in securities traded in Hong Kong.
Elsewhere, Shanghai rose 0.68 per cent in early trade, Seoul opened 0.9 per cent higher, Singapore gained 1.3 per cent, Sydney firmed 0.5 per cent and Kuala Lumpur added 0.4 per cent. Taipei slipped 0.16 per cent.
"The fact that the US stock market has stabilised to an extent gives investors some comfort but it will be a while before investor sentiment recovers completely from the trauma of recent losses," said Katsuhiko
Hiroshige, a market analyst at Traders & Co in Tokyo.
Investors took a breather after recent gains although many of the region's bourses managed to notch up further modest gains amid hope that the worst of the recent turmoil on world markets has abated.
Now the focus is on what the US Federal Reserve's next move will be to ease credit fears and to restore market stability, with many market players hoping for a cut in the key Fed funds target rate to restore confidence.
The region was also digesting an announcement late Tuesday from China's central bank that it would raise interest rates for the fourth time this year in a bid to rein in mounting inflation and cool the domestic economy.
Japanese investors were cautious ahead of an interest rate decision by the Bank of Japan on Thursday, although recent market turbulence is expected to deter the central bank from raising its super-low rates from 0.5 per cent yet.
But with world markets enjoying a spell of relative calm after last week's rollercoaster ride, analysts were optimistic that stocks can extend a rebound.
"I think the selloff is a buying opportunity and I expect markets to recover their composure and move higher," said Adrian Mowat, chief Asian equity strategist at JP Morgan Securities in Hong Kong.
He said Asian markets should regain levels seen before the recent sharp falls triggered by fears of a credit crunch, although it might take several months with the potential for more losses in the meantime.
"I think we've probably seen the worst but I'm sure there will be more negative newsflow out, particularly from US credit markets," he said.
Japanese shares opened lower as investors locked in some of their recent gains, awaiting Thursday's interest rate decision and press conference from BoJ governor Toshihiko Fukui, with the Nikkei-225 index down 0.18 per cent by lunch.
Hong Kong opened 1.0 per cent higher as investors there continued to take heart from the recent announcement that mainland Chinese will be able to invest directly in securities traded in Hong Kong.
Elsewhere, Shanghai rose 0.68 per cent in early trade, Seoul opened 0.9 per cent higher, Singapore gained 1.3 per cent, Sydney firmed 0.5 per cent and Kuala Lumpur added 0.4 per cent. Taipei slipped 0.16 per cent.
"The fact that the US stock market has stabilised to an extent gives investors some comfort but it will be a while before investor sentiment recovers completely from the trauma of recent losses," said Katsuhiko
Hiroshige, a market analyst at Traders & Co in Tokyo.