Business





Saturday May 17, 2008

Weekly Wrap - Major Asian markets


Regional bourses regained strength this week, bolstered by steady Wall Street performance, thanks to a series of positive US data. Investors reacted calmly to news of a powerful earthquake, which rocked China’s Sichuan province. Regional investors bought into export-related stocks, taking advantage of weaker Asian currencies against a firmer US dollar. Expectation also grew that the US Federal Reserve’s aggressive rate-cutting policy has come to an end. Over the week, crude oil prices soared to a fresh high of US$127 per barrel. Nikkei 225 topped the best performers list followed by KOSPI. On the bottom was SHComp.

Malaysia - KLCI

Despite the sell-off in Wall Street and shocking news of an earthquake in China, the benchmark KLCI managed to finish 0.6% higher on Monday, led by bargain-hunting on plantation and banking heavyweights. The index slipped 0.5% on Tuesday, even after regional bourses recovered and a lower crude oil price. Driven by regional strength, the KLCI regained its momentum on Wednesday and climbed on Thursday after S&P raised its weighting on Malaysia to “market weight” with a revised year-end target of 1,400 from 1,300. The KLCI surpassed the 1,300 psychological level by gaining 0.5% on Friday boosted by overnight gain on US DJIA.

Trading remained cautious over the week; average daily volume virtually unchanged at 558m shares.

Singapore - FTSTI

Investors set aside concerns of higher crude oil prices and weaker US closing on Friday, as the FTSTI recovered from its early loss to end up on Monday. The momentum continued on Tuesday, and the FTSTI added another 0.7% . But profit taking set in, pressing the key index lower by 0.2% on Wednesday after US markets retreated overnight. It bounced back by 0.3% on Thursday on bargain-hunting supports on tame US inflation figure and lower oil prices. It gained 1.06% on Friday on growing optimism that the worst of the credit crisis may be over.

Japan - Nikkei 225

After declining in the early session, renewed buying supports on export-related stocks amid a weaker Japanese yen helped lift the Nikkei 225 higher on Monday. A strong overnight bounce in the Dow, as well as falling crude oil prices lent further support on Tuesday. The index cut above the 14,000 psychological level, gaining 1.2% on Wednesday, and another 0.9% on Thursday to reach its highest level in four months, thanks to better US market performance. The index eased 0.23% on Friday, despite reports that its economy grew at an annualised rate of 3.3% in the first quarter.

South Korea – KOSPI

Korea’s KOSPI resumed trading on Tuesday after Monday’s public holiday, rising 1.0% due to foreign interests on tech stock on the back of a weaker won. On Wednesday, the Korea market ended flat after seesawing between positive and negative territories, but rallied over 2.3% on Thursday, buoyed by optimism over major exporters’ strong earnings outlook and easing worries over the US economy. The key index touched its highest closing since end-Dec last year and gained 0.2% to 1,888.88 on Friday.

China – SHComp

Monday’s gains were narrowed to only 0.4% after a massive earthquake measuring 7.8 magnitude hit China’s Sichuan province in the afternoon. Reeling from the impact of the Monday’s earthquake, and the central bank’s decision to raise bank reserve ratio by another 50bps, the benchmark index fell 1.8% on Tuesday. There were 66 companies related to Sichuan suspended on Tuesday to avoid panic selling. It, however, kicked off a strong 2.7% rally on Wednesday on better prospects for reconstruction-related companies post-earthquake in Sichuan. China shares began profit taking on Thursday, losing 0.5% following a steep rebound earlier, and the resurface of fears on possible tightening measures ahead. The index fell another 0.36% on Friday on afternoon profit taking.

Hong Kong - HSI

Hong Kong’s HSI kicked off the week on Tuesday on a strong note. Sentiment was mainly lifted by HSBC’s US-based consumer finance unit that posted lower-than-expected provision, while brushing aside the potential impact from the China’s earthquake. The HSI gained 2.0% on Tuesday, but stayed flat on Wednesday despite strong gains in China markets. The key index lost marginally on Thursday on profit-taking activities despite some upgrades on key heavyweight stocks. The sideways movement continued to Friday in a quiet and directionless trading.

Thailand – SET

Undermined by worries over inflation pressure following a rally in the global crude oil prices, Thailand’s SET succumbed to profit-taking pressure. It slipped on Monday and Tuesday to a weekly low of 837.86. Thereafter, it came back with a strong rebound, jumping 1.2% on Wednesday on Thailand Supreme Court’s decision not to take a corruption case against the finance minister. The SET rose 0.8% and 1.7% on Thursday and Friday respectively, due to foreign purchases on optimism that the political situation is improving.

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