Asian stocks bounce back by close


Stocks moved ahead sharply in Hong Kong and Tokyo, as Asian markets bounced back from their selloff Wednesday

By staff and wire reports

HONG KONG, China -- Asian stocks bounced back Thursday after a sharp drop the day before. Hong Kong had a particularly forceful showing, rising more than 2.5 percent.

Japan's Nikkei made up half of its losses from Wednesday, closing with a gain of 1.4 percent at 10,431.79.

The broader Topix gained 0.76 percent, to end at 1,046.45. As usual, its runup was less dramatic than the Nikkei, which has a leaning toward technology stocks, just as Wednesday's selloff was smaller.

Blue chip stocks led the way as investors bought back in after a U.S. rate cut. Japanese bank stocks weathered a scare over one of the bigger players. Traders ended up driving bank stocks higher as they raced to cover short positions.

Australian stocks were moving ahead, with investors keeping one eye on this weekend's general election. New Zealand's market sold off 1 percent, though.

South Korean stocks also enjoyed a day in the sun, rising 2 percent. But Taiwan fell more than half a percent. It had been virtually the only market to rise on Wednesday.

Singapore stocks were posting a gain of more than half a percent heading toward the close. Stocks in India were hot, with the Mumbai exchange putting on 1.3 percent and gaining steam as the day went on.

Japan moves up in bank squeeze

In Japan, big issues like Toyota Motor Corp. led the way forward. It rose 3.5 percent to 3,090 yen ahead of its earnings.

After the bell, Toyota posted a 35 percent rise in first-half operating profit, to 506.6 billion yen ($4.2 billion). That was a strong showing, as the exporter said a weaker yen helped its numbers.

Fujisawa Pharmaceutical Co., Japan's No. 7 drugmaker, rose 3.8 percent to 2,875 yen. It posted a first-half net profit of 13.2 billion yen, up 45 percent over last year.

The biggest scare of the day for the bulls came from Asahi Bank. The city bank's stock tumbled as much as 30 percent, to 76 yen, on fears about the bank's stability.

The rumor lost ground during the day. Asahi stock ended down just 9.7 percent, at 102 yen.

The rebound caught some traders in what they call a "short squeeze" on bank stocks After selling bank stocks short, betting they would go down, they ended up driving them higher as they got out of the positions, as Asahi rose.

Mizuho Holdings, the world's largest bank by assets, was one beneficiary. It closed with a gain of 5.7 percent at 333,000 yen, after hitting a lifetime low of 308,000.

Fresh data showed that despite virtually zero interest rates, bank lending continues to drop in Japan.

Hong Kong's China plays up strongly

In Hong Kong, the benchmark Hang Seng index gained 2.6 percent to end at 10,538.62.

Its China plays were particularly strong, as China preps to enter the World Trade Organization after a 15-year quest on November 10.

Export stocks were also driving higher.

One of the few losers was Legend Holdings, mainland China's largest computer maker, which fell 1.65 percent to HK$2.95.

China's B share markets strengthened on the back of the Hong Kong gains.

The Shanghai and Shenzhen markets sold off the day before on fears a government crackdown on corruption would put off investors.

On Thursday, Shanghai rose 0.87 percent, while Shenzhen put on 1.46 percent.

Banks fire ahead again in Sydney

Australia's benchmark S&P/ASX 200 index climbed 0.5 percent to 3,269.4, after hitting a two-month high during the day.

News Corp., the largest listing, lost 2.4 percent to A$13.49 after missing analysts' estimates on its first-quarter earnings.

National Australia Bank closed up 1.7 percent at A$30.50 after reporting a 19 percent rise in its full-year profits, to A$4.0 billion ($2.1 billion).

That drove other banks up. Westpac, Australia's No. 3, lifted 2.7 perrcent ot A$15.41 after reporting strong earnings of its own last week.

New Zealand's NZSE-40 Capital index fell 1.04 percent to 1,974.23.

Independent Newspapers led the losses, falling 5.8 percent to NZ$3.55. The company, half-owned by News Corp., finished buying back 9.7 million of its own shares.

Telecom New Zealand, the largest listing, stood pat at NZ$4.66 on light turnover.

It was mainly merger news moving the market. Contact Energy fell 3 cents to NZ$4.06, well off Edison Mission Energy's offer of NZ$4.25 for the company.

Frucor Beverages also lost ground, dipping 2 cents to NZ$2.41. After the market closed, Pacific Equity Partners, its main shareholder, said it had accepted Groupe Danone's offer of NZ$2.35 for the company.

Frucor stock has been trading higher than the offer price because a bidding war looked set to ensue.

Hynix up in Seoul

In Seoul, the benchmark Kospi index closed up 1.96 percent at 573.04.

Hynix Semiconductor was the most active stock, as it often is. The troubled chipmaker, the world memory chip No. 3, climbed 0.8 percent to 1,200 won.

A local newspaper reported three Chinese groups are in talks to buy some of the embattled company's assembly lines.

Cell-phone provider SK Telecom drove 5.6 percent higher to 263,500 won, lifted by overseas buying interest.

The central Bank of Korea left interest rates alone, but the widely expected move didn't budge stocks.

In Taiwan, stocks fell for the first time in six days. The Taiex closed down 0.56 percent at 4,135.03.

That was despite a 25 basis point cut in interest rates on Wednesday from Taiwan's central bank.

The market was selling off after strong gains on Wednesday, after Taiwanese officials freed up investment restrictions between Taiwan and mainland China.

Some of Taiwan's largest stocks are still moving forward, however. On Thursday, Taiwan Semiconductor Manufacturing Co., the world's largest contract chip maker, rose 0.75 percent to T$67.50.

Its rival United Microelectronics rose 2.04 percent to T$35.00, on hopes it will post strong October sales.

In Singapore, the Straits Times index was up 0.58 percent at 1,336.21 in late trade. Singapore Telecommunications was dominating trade, dipping ahead of its earnings.

It reported a drop of 8.7 percent in profits for the first half, to S$1.16 billion ($639 million) at the lunchtime break.

Reuters contributed to this report.