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Korea, Taiwan rampant as Asia gains
By Alex Frew McMillan
HONG KONG, China -- Asian stocks ran up yet again on Friday, with South Korea and Taiwan running rampant. The gains were broader and more convincing than on Thursday, with Wall Street returning to its winning ways. Some strong earnings also boosted stocks in markets like Seoul. Japan's Nikkei average ended up 1.41 percent at 9,086.13, the first time in two weeks it has finished above 9,000. Tokyo's broader Topix finished ahead 1.07 percent at 893.95, hanging on to most of its morning rise, for Japan's fifth day in a row of gains. For the week, the Nikkei gained 6.5 percent, making this the Tokyo market's best week since March. Hong Kong closed on a slight gain, while Australia and New Zealand both returned to winning ways. But the fire was in Asia's tech driven markets. Stocks in Taiwan and South Korea both surged a heady 4 percent, a sixth straight rise for the Seoul market. The only area of weakness in Asia's main markets came in Singapore, where morning gains gave way. The Straits Times index ended with a fall of 0.32 percent. NEC leads the tech gains in TokyoIn Tokyo, techs were encouraged by a strong earnings report from Microsoft, which also boosted its forecast. (Full story) Computer and chip maker NEC Corp. leaped 5.45 percent to 522 yen. Chip spinoff Resona Holdings climbed 2.56 percent to 80 yen.
Sony Corp. added 3.17 percent to 5,540 yen as investors took to companies with big U.S. sales. But car stocks were winded as the day wore on and closed only just above break-even. Bank stocks surged in afternoon trade to lock in a strong performance. Mizuho Holdings gained 3.93 percent to 185,000 yen, while UFJ Holdings gained 4.44 percent to 188,000 yen. They were boosted by signs that new Financial Services Minister Heizo Takenaka may be easing his tough stance on the banks. Debt-weary retailer Daiei Inc. won a bailout that includes 10 billion yen in funds from the state-run Development Bank of Japan, suggesting the "get tough on debt" stance may not last. (Full story) Daiei closed up 10.74 percent at 165 yen, as it also reported it doubled first-half profit by closing stores. (Full story) Banks gain on easier stanceDetails of Takenaka plans for the banks are leaking out to the local media. But Richard Jerram, chief economist for ING Barings in Japan, said he is encouraged that Takenaka will still act.
"The Takenaka Project Team seems to be taking a direct route to the issue of bank capitalization," Jerram stated. "Despite intense hostility from a range of vested interests, a bad loan resolution still seems to be on track." The yen stands weaker at 125.41 to the U.S. dollar, near its four-month weak point. By contrast, Indonesia's rupiah, battered at the start of the week after the bombings in Bali, ended steady at 9,209 to the buck. Jakarta stocks finished up 1.63 percent on Friday. Korea boosted by earningsIn Seoul, Korea's largest listing got a jolt as it reported that profits quadrupled for the third quarter. Samsung Electronics closed up 6.18 percent to 326,500 won, a big boost for a stock that makes up 18 percent of the market. It predicted stronger cell-phone sales in the fourth quarter and hinted at a change in direction. (Full story) Its consumer-electronics competitor LG Electronics sprinted ahead 8.15 percent to 37,150 won, one day after saying it returned to a profit for the third quarter, from a loss. (Full story) Samsung's strong showing also boosted other memory chipmakers in Asia. Hynix Semiconductor spurted forward the 15 percent daily limit to 460 won. It was a heavy day for earnings in Korea, with cell-phone service SK Telecom also reporting. Its stock ended up 2.41 percent at 233,500 won, although its profits were down quarter on quarter and missed forecasts. Asiana Airlines rose 2.78 percent to close at 2,220 won despite being slapped with a record $750,000 fine from U.S. regulators for illegally routing customers. (Full story) Taiwan the strongest in AsiaTaiwan narrowly outdid Korea to ring in the strongest performance in Asian equities. The benchmark Taiex rocketed 4.14 percent to 4,458.17. The impetus was a strong showing for U.S. techs on Thursday. The U.S. rally resumed for a fifth day out of six, the Dow Jones industrial average finishing up 2.97 percent at 8,275.04. Nasdaq outdid that with a 3.24 percent rise to 1,272.29. (U.S. roundup) In Taipei, that translated into a 7 percent "limit up" run for flat-screen maker Au Optronics, again topping the volume charts and winning investor hearts. Its smaller rival CPT matched that with a surge to T$12.75. Chip foundries TSMC and UMC were also both "limit up" for the day. Transport stocks pushed forward, China Airlines up 3.64 percent to T$12.80, while competitor EVA Airways climbed 4.25 percent to T$13.50. Sydney in solid gainIn Sydney, Australia's benchmark S&P/ASX 200 index finished up 0.7 percent at 3,010.6. News Corp. climbed 4.3 percent to A$10.46 after a 5.4 percent rise in its U.S. listing. Big mining also enjoyed a bump, BHP Billiton climbing 2.5 percent to A$10.03 and Rio Tinto rising 2.4 percent to A$32.35. Insurance Australia Group was down 15 percent to A$2.51 after saying it would pay $1 billion to buy the Australasian insurance operations of Britain's Aviva PLC. (Full story) In New Zealand, the Top 40 finished up 0.83 percent at 2,006.18. Telecom New Zealand gained 1.38 percent to NZ$5.14. Carter Holt Harvey also edged forward, up 2.5 percent to A$1.64 after reporting earnings this week. Air New Zealand leaped 6.25 percent to NZ$0.51 as the government said it had reached deals for increased flights to Korea and Japan. Hong Kong just above evenIn Hong Kong, the Hang Seng ended with a narrow 0.39 percent gain to 9,613.07. China's cell-phone No. 2 China Unicom added 4.19 percent to HK$4.98 after it reported a boost in sales and better adoption for its expensive CDMA network. (Full story) The positive tech earnings in the United States boosted Legend Group, China's largest computer maker, up 4.9 percent to HK$2.68. Cathay Pacific stock gained 3.51 percent to HK$11.80, with Hong Kong and the United States tentatively agreeing on an air-services pact. Property stocks were generally down, hampering a stronger run. In Singapore, the market turned around in the afternoon to end down 0.32 percent at 1,461.39. Banks United Overseas Bank and OCBC ended down 2.27 percent and 0.94 percent, respectively. Chip foundry Chartered Semiconductor lost 1 percent to S$0.99 amid heavy volume attributed to short sellers covering their positions.
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