February 14, 2008

Asian stocks rise as economic fears ease

Asian shares rose on Thursday after Japan's economy grew by more than expected and US retail sales saw a surprise increase, easing fears about a global slowdown.

Japan, Hong Kong and Taiwan all gained by more than 3 per cent during their morning sessions, and the MSCI Asia Pacific index was 2.6 per cent higher by late morning in Tokyo. In India, the Sensex was 3.3 per cent higher in the first few minutes of trade at 17,504.

Chipmakers were some of the biggest risers, as the outlook for exports improved. Samsung Electronics gained 2.8 per cent to Won590,000 and Taiwan Semiconductor Manufacturing (NYSE:TSM) rose by 2.3 per cent to T$61.30.

Platinum hit a lifetime high of $2,000 a troy ounce on persistent worries about production difficulties in South Africa, the world's largest producer of the precious metal. Palladium prices stayed close to six year highs at $438.00 an ounce.

The Nikkei 225 average made its biggest gain so far this month. It was 3.5 per cent higher early in the afternoon session at 13,523.99 and the broader Topix was up by 3.2 per cent at 1,326.73.

Optimism was boosted by figures showing Japan's economy expanded by 3.7 per cent in the last quarter, more than double many predictions, thanks to a jump in exports to the rest of Asia and to emerging markets.

The data suggested that Japan may be more resilient to any US recession than previously thought. Nevertheless, the mood had already been lightened by data overnight that showed US retail sales grew by 0.3 per cent in January, compared to a 0.4 per cent fall in December.

The yen stayed close to its weakest level for a month at Y108.18 per dollar.

Big Japanese exporters rose sharply. Nintendo, the games maker, jumped by 5.7 per cent to Y50,800 and Canon (NYSE:CAJ), the consumer electronics and office equipment manufactuer, gained 4.0 per cent to Y4,710. Carmakers also saw their shares rise Honda Motor (NYSE:HMC) rose by 5.1 per cent to Y3,290 and Nissan (NASDAQ:NSANY) was up by 4.7 per cent to Y966.

Hong Kong shares gained across the board. The Hang Seng index was 3.4 per cent higher at the lunchtime break at 23,966.40

Mainland mobile telecom companies gained on news that regulators would loosen caps on long-distance calls from cellphones from March. China Mobile rose by 3.5 per cent to HK$120.00 and China Unicom (NYSE:CHU) gained by 2.3 per cent to HK$18.50.

In Australia, miners and financial stocks accounted for three-quarters of the 2.6 per cent rise in the S&P/ASX index to 5,685.8 by mid afternoon in Sydney. The market was helped by buoyant commodity prices. BHP Billiton (NYSE:BHP), the world's biggest miner, rose by 3.4 per cent to A$38.61 and its takeover target Rio Tinto continued to rally on Wednesday's profit figures, gaining 2.9 per cent to A$132.29.

Commonwealth Bank of Australia rose by 2.3 per cent to A$47.24 and the investment bank Macquarie was up by 2.6 per cent to A$58.35. Macquarie Fortress Investments, a fund managed by an entity controlled by Macquarie, rose by 9.1 per cent to A$0.06.

Singapore shares managed to shrug off a revision to government figures that showed the economy contracted by more than first thought in the last quarter of 2007. The Straits Times index was 2.8 per cent higher at 3,030 by lunchtime in Singapore.

In South Korea, Kospi was 2.9 per cent higher early in the afternoon session in Seoul at 1,678.88.

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