Tuesday 1 November, 10:00 AM BST (Thomson Financial): Asian markets had
another day of excellent performance on positive sentiment overhanging
from Wall Street and local news. Japan's market closed strongly higher on
an upbeat economic outlook from The Bank of Japan, while Hong Kong's
market rose in line with Wall Street. Meanwhile, the Korean bourse surged
ahead on strong corporate earnings, while in Taiwan, gains in the market
were limited by profit taking. Finally, the market in Australia gained on
U.S. sentiment amid light trade owing to a national holiday in a major
trading state.
Tokyo's Nikkei-225 Index jumped by 261.36 points or 1.92% to 13867.86,
while Hong Kong's Hang Seng Stock Index rose by 185.89 points or 1.29% to
14572.26. Korea's Kospi Index soared by 30.84 points or 2.66% to 1188.95,
while Taiwan's Weighted Index gained 34.11 points or 0.59% to 5798.41.
Australia's All Ordinaries Index inched up by 12.30 points or 0.28% to
4425.00.
Japan's market surged ahead, with the key share index hitting four-year
highs in a trading session shortened by a software failure in the trading
system. The market was buoyed by an upbeat outlook from the Bank of Japan
and the cabinet reshuffle from Prime Minister Koizumi, who put allies that
support his reform agenda in key positions. Sectors related to the
strength of the local economy gained as construction companies were lifted
by the positive outlook, with real estate and banking stocks also
benefiting from the news.
In its half yearly report on the state of the economy, The Bank of Japan
upgraded its forecasts for prices and economic growth from the last report
in April. The median core CPI forecast increased to an expected rise of
0.1% in the fiscal year ending March, from the previous 0.1% expected
fall, while the median forecast for GDP rose to 2.2%, up from a 1.3%
growth forecast before.
In the construction sector, Toa was the star performer with an almost
double-digit rise, with Obayashi and Kajima also large risers, while in
the banking sector, Sumitomo Mitsui Financial Group and Resona Holdings
made strong gains as Mitsubishi UFJ Financial Group also increased in
weight. Elsewhere, real estate stocks did not miss out on the bullish
sentiment; Daikyo enjoyed a massive rise, with Sumitomo Realty and Heiwa
Real Estate, strong performers.
Hong Kong's market closed higher as sentiment carried over from the
overnight increase in U.S. markets. In the telecom sector, China Mobile
and conglomerate Hutchison Whampoa, which has large interests in the
sector, were both up after reports that Hutchison would sell a stake in a
mobile operator in Israel, while property stocks ended higher, with Wharf
Holdings, Sun Hung Kai Properties and Hang Lung Properties all up on the
day. Elsewhere, computer hardware maker Lenovo Group fell after reporting
a growth in net profits in the first half at the bottom end of
expectations.
In Korea, the key share index posted excellent gains led by the financial
sector and positive sentiment from overnight strength on Wall Street.
Kookmin Bank surged after reporting net profit nearly tripled to 923.9
billion won in the third quarter from 322.1 billion won a year ago, while
Shinhan Financial roared ahead after reporting third quarter net profit
rose 25.7% to 407.4 billion won, with Korea Exchange Bank and Hana Bank
also benefiting from positive sentiment in the sector. Elsewhere, Samsung
Electronics closed higher, while in the automobiles sector, Kia Motors was
lifted by the news that its chief executive officer bought a stake in the
company.
Meanwhile, Taiwan's market closed higher, tracking overnight gains on Wall
Street, although the rise was capped by profit taking in selected large
cap stocks. In the technology sector, Hon Hai Precision Industry rose
after reporting quarterly net profits of 11.09 billion won, up 41% from a
year ago, while Quanta Computer gained after reporting double-digit growth
in third quarter net profit to 3.42 billion won. However, on a weaker note
UMC suffered heavy losses, with TSMC closing slightly down, while Nanya
technology also slipped.
Finally, the market in Australia was marginally up on the previous day,
supported by overnight rises on Wall Street in light trade due to a public
holiday in the state of Victoria. Resources majors BHP Billiton and Rio
Tinto ended the session higher, with banks such as National Australia Bank
and ANZ also rising. However, there was some weakness in the oil sector
following an easing of oil prices as Woodside Petroleum and Oil Search
slipped.
Ian.Littlewood@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
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SOURCE Thomson Financial Corporate Group
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