Asian shares rally as yen appreciates

SINGAPORE, June 17: Asian stocks rallied with the yen on Wednesday after hefty falls the previous day, as the Japanese unit headed back abov...

SINGAPORE, June 17: Asian stocks rallied with the yen on Wednesday after hefty falls the previous day, as the Japanese unit headed back above 144 to the dollar. South Korea staged the strongest gain, as the composite index briefly rose above the 300 level. It was up 7.3 per cent before falling back to 298.35 at 0510 GMT, still up 6.55 per cent or 18.35 points.

Hong Kong’s Hang Seng index opened up 3.47 per cent in a technical rebound. At 0500 GMT, it was up 3.83 per cent to 7814.42, a rise of 287.97 points. The yen in early Tokyo trade hit a high of 142.3 to the dollar, but later slipped and was trading at around 143.5 in early afternoon.

Analysts in Hong Kong said the Hang Seng’s overall trend was still negative."The momentum is still on the downside," said Steven Thompson, chief analyst at Nikko Research Center (HK). "When it is oversold, we will see some little bounces like we are seeing now but it is a temporary move."

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Tokyo’s key Nikkei average rallied in the morning, but was almost flat at midday,as the yen’s rally lost steam. The index was marginally up at midday, after reaching a high of 14,899.85 during the morning but spun into negative territory in the afternoon. It was down 4.4 points at 14,715.98 at 0520 GMT.

"The yen rose, but I don’t think the yen’s downward trend has turned around," said Masatoshi Sato, manager at Kankaku Securities Co Ltd. Shares in Thailand and Malaysia also staged strong rallies in early trade. The Kuala Lumpur Stock Exchange Composite Index was up 1.92 per cent or 8.35 points by midday to 444.19. The rallying yen and a firmer ringgit helped the rise. Thailand’s beleaguered SET index rose 2.04 per cent in early trade on regional gains and the yen. It was up 2.58 per cent to 264.07 at 0530 GMT, a gain of 6.63 points.

"The Japanese yen, which quite firm this morning, and gains in several regional markets have helped the Thai market, which has fallen several days in a row," said a trader at a local brokerage. The battered Jakarta stock index was up more than three percent on arbitrage buying. It stood at 412.259 at 0515 GMT, up 3.19 per cent or 12.747 points.

Arbitrage plays Telkom and Indosat, which are also listed overseas, were sharply up. Telkom was up 350 rupiah to 3,975 while Indosat gained 1,100 rupiah to 16,000. Singapore shares were also higher, led by a rebound in banking and property stocks. A stronger Singapore dollar also helped lift shares.

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The Straits Times Industrials index was up 1059.53 at 0515GMT. up 1.01 per cent or 10.57 points. "It is mainly a technical bound as the market has been very oversold. Property and banks, which have been the worst hit, are up again," a broker with a Singapore firm said.

Taiwan stocks closed up 0.84 per cent at 7,466.38.