Asian stocks end mixed
Asian stocks ended mixed Wednesday following an early rally that was led by confidence after the US Federal Reserve bailed out troubled American Insurance Group (AIG).
A day after the region's indices plummetted following the collapse of Wall Street investment bank Lehman Brothers Seoul and Tokyo reversed some of their losses but Hong Kong fell to its lowest level in almost two years.
Markets opened favourably to gains on Wall Street on Tuesday, which had reacted after the US Federal Reserve said it would extend an 85-billion-dollar loan to AIG. The move will give the US government nearly an 80 percent stake in the insurer.
Investors were also cautious after the Fed Tuesday held its base lending rate at 2.0 percent, saying the economy was likely to achieve "moderate" growth over time despite the financial turmoil, dealers said. They had been expecting a quarter point cut.
However, the rally failed to keep the momentum and shares began to fall back again. Hong Kong, which had opened 2.1 percent higher, fell back and closed 3.6 percent down, beneath 18,000 points and at its lowest level since October 4, 2006.
Singapore also ended near a two-year low, despite a promising opening to the day. Worries of a possible technical recession hitting Singapore were triggered after key exports tumbled 14.0 percent in August from a year ago.
Tokyo managed rallied at the beginning of the day, opening up two percent before settling down to close the day 1.21 percent better off. The gains came as the central Bank of Japan announced it had pumped 5.5 trillion yen (51.6 billion dollars) into the money markets since Tuesday.
Seoul, which had tanked 6.1 percent Tuesday, regained some ground and closed almost three percent higher, while the won also made significant gains against the dollar after losing out massively the day before.
"Although it will take some time for the US financial system to stabilise completely, investors seem to think the worst case (scenario) has passed after Lehman filed for bankruptcy and the US government decided to rescue AIG," Kim Joo-Hyeong, an analyst at Tong Yang Securities, told Dow Jones Newswires.
Shanghai ended almost three percent off after it was announced that two of its lenders had tens of million of dollars in exposure with Lehman.
Sydney, which also opened higher, fell back to close down and Taiwan shares closed up but a late sell-off pared back a bigger early advance.
In other markets Bangkok was off more than three percent as dealers were still wary about the global economy.
Jakarta rose for a second straight day, while Wellington and Manila lifted more than one percent but Kuala Lumpur shed almost one percent and Mumbai was 1.89 percent down.
TOKYO: Japanese share prices closed up 1.21 percent, dealers said.
But the market lost some of its early gains as concerns re-emerged about the health of the US and domestic economies following the collapse of Lehman Brothers.
The Bank of Japan has pumped 5.5 trillion yen (51.6 billion dollars) into the money markets since Tuesday, hoping to provide investors with enough cash as Wall Street undergoes a major restructuring.
The Tokyo Stock Exchange's benchmark Nikkei-225 index closed up 140.07 points at 11,749.79. The Nikkei paired early gains, ending the morning session up more than two percent.
The broader Topix index of all first-section shares rose a more modest 3.86 points or 0.35 percent to 1,121.43.
Comments