Wednesday 21 September, 10:00 AM BST (Thomson Financial): Asian markets
ended the day mixed after Wall Street dropped overnight, while the Federal
Reserve lifted U.S. interest rates by 25 basis points. The Japanese market
gained, as investors focused on domestic economic prospects, but Hong Kong's
market slipped. The Korean bourse climbed to a new record high, but Taiwan's
market fell as investors took profits. Finally, the Australian market
declined, as investors moved out of resources stocks and moved into banking
stocks instead.
Tokyo's Nikkei-225 Index rose by 48.00 points or 0.37% to 13,196.57, while
Hong Kong's Hang Seng Stock Index slipped by 18.24 points or 0.12% to
15,223.62. Korea's Kospi Index added 5.74 points or 0.48% to 1196.67, but
Taiwan's Weighted Index fell by 38.01 points or 0.62% to 6067.34.
Australia's All Ordinaries Index ended down by 25.40 points or 0.56% to
4501.80.
Despite some early losses, the Japanese equity market ended the day higher
on continued hopes the economy is on an improving path. This came despite Wall
Street's overnight losses and the rate hike by the U.S. Federal Reserve by 25
basis points to 3.75%. The U.S. central bank added that while the devastation
caused by Hurricane Katrina had increased near-term economic uncertainty, this
did not pose a longer-term threat. Moreover, the central bank added that it
still believed that its policy accommodation could be removed at a "measured
pace".
Hopes of a domestic economic improvement galvanised banking stocks, which
ended mostly higher, with Mitsubishi Financial Group, UFJ and Sumitomo Mitsui
all ending higher, while insurance and brokerage stocks also benefited. Car
manufacturers were mixed, with major players Honda and Toyota weaker, but
Nissan gained, while in the technology sector, stocks were mostly higher.
Mitsubishi Electric added to Tuesday's strong gains after it upped its full-
year group net profit forecast.
In Hong Kong, the market fell as investors expected lending rates to rise
after the Hong Kong Monetary authority matched the Federal Reserve's 25 basis
points rate hike. However, despite the higher rates, the properties sector
climbed ahead of the government's land auction next week. Meanwhile, the
financial sector slipped, but elsewhere, Hutchison Whampoa rose after news
that it had applied to float its Italian third generation wireless unit.
On a stronger note, the Korean market rose to a new record high, despite
Wall Street's weakness and the U.S. Federal Reserve's 25 points interest rate
hike. Heavyweight technology group Samsung Electronics helped drive the market
higher, while LG Philips LCD and LG Electronics were also higher, although on
a weaker note, Hynix Semiconductor slipped. Banking stocks underperformed,
although Woori Financial edged higher.
Meanwhile in Taiwan, the market fell as early gains encouraged investors
to take profits, especially after Wall Street fell overnight, while the U.S.
Federal Reserve's statement left the impression that it would continue to hike
rates gradually. Moreover, a weakening of the domestic currency heightened
fears that foreign capital might flow out of the territory. Memory chipmakers
were under particular pressure on reports of falling prices, with Powerchip,
ProMOS and Nanya Technology all weaker.
Finally, the Australian market declined, under pressure from Wall Street's
overnight falls and the rise in U.S. rates. Investors sold off heavyweight
resources stocks BHP Billiton and Rio Tinto, while rising crude prices had
only a mixed effect on oil stocks. Banking stocks attracted buying, as
investors switched to more defensive stocks, with National Australian Bank and
ANZ Bank among lenders ending higher.
Olivier.Masson@thomson.com; Thomson Financial
This is Thomson Financial Corporate Services Asia Market Commentary. The
information herein is believed to be true and accurate. If you have any
questions please e-mail James Sang at James.Sang@tfn.com. We take no
responsibility for inaccurate information and reserve the right to update our
reports. For more information about Thomson Financial visit us on-line at
http://www.thomsonfinancial.com.
SOURCE Thomson Financial Corporate Group
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