Friday, 17 July 2009

Asian Shares End Mostly Higher But Jakarta Stks Dn On Blasts

Asian Shares End Mostly Higher But Jakarta Stks Dn On Blasts

SINGAPORE (Dow Jones)--Most Asian share markets ended Friday's trading on a buoyant note to take home weekly gains, with commodity and shipping stocks broadly advancing on hopes of an economic recovery.

Indonesian stocks and currency tumbled after bomb blasts at two luxury hotels in Jakarta killed at least nine people and injured 50. But losses were pared during the course of the day as investors remained optimistic about the country's economic and political prospects.

"Global factors are still in favor of Indonesia. Pessimism over the U.S. economy is receding, encouraging global investors to reenter emerging markets, including Indonesia," said Standard Chartered economist Eric Sugandi.

Indonesia's main share index tumbled 2.7% in early trading, but recovered somewhat and closed down 0.6% at 2106.35. Shares of PT Holcim Indonesia fell 3.8%. Chief Executive Timothy Mackay was among those killed in the bomb blasts, a company official said. Among other Indonesian shares, Bakrie & Brothers shed 2.3%, Bumi Resources declined 1.1% and Bank Negara Indonesia also lost 1.1%.

In currency markets, the U.S. dollar jumped as high as 10190 rupiah, but also pared gains and was recently buying 10150 rupiah. "Fundamentals in Indonesia are very, very strong," added Craig Chan, a currency strategist with Nomura Securities.

Shares in Japan, Hong Kong, Australia, South Korea and Taiwan stretched their gains into a fourth straight session.

Japan's Nikkei 225 Average rose 0.6% to 9395.32, with trading volumes modest ahead of a three-day weekend, given Monday's national holiday.

Hong Kong's Hang Seng Index jumped 2.4% to 18805.66 and India's Sensex surged 2.8% in afternoon trading. Australia's S&P/ASX 200 inched up 0.1%, South Korea's Kospi gained 0.6%, Taiwan's Taiex rose 1%, New Zealand's NZX 50 advanced 0.2% and Singapore's Straits Times Index climbed 1.3%.

BNP Paribas analyst John Hetherington said the bullish tone in Asian markets was probably because of earnings growth expected next year.

"On average, our analysts expect earnings this year to fall 6% in Asia...Next year, however, is a completely different story, thanks to a low base after two years of falling profits. Our analysts project a remarkable 32% rebound in earnings," he added.

Dow Jones Industrial Average futures were recently down 19 points in screen trade. Investors were still watching news from U.S. lender CIT Group. Large bondholders were discussing a plan to exchange $5 billion in debt for equity in the company, which was also trying to raise emergency funds to avert a bankruptcy filing, said a person familiar with the matter.

Still, "investors are reluctant to buy (heavily) because of concerns over CIT Group's possible bankruptcy filing, which could come during Japan's long weekend," said Yumi Nishimura, market analyst at Daiwa Securities SMBC. Japanese markets will be shut Monday.

China's Shanghai Composite gained 0.2%, erasing early losses. There were some concerns of monetary tightening in the wake of strong economic data released over the last few days, but a few economists didn't see that happening anytime soon.

"China's economy is in better shape than many other countries, but it doesn't have a proper social safety net. Until Beijing feels more comfortable about job creation, we think it will avoid symbolically significant tightening measures, such as rate hikes, to avoid crushing confidence," Credit Suisse research analyst Dong Tao wrote in a report.

Energy and shipping shares were broadly higher, aided by an overnight increase in commodity prices. Woodside Petroleum gained 2.9% and BHP Billiton rose 0.8% in Sydney, Cnooc climbed 1.7% and China Cosco Holdings advanced 2.1% in Hong Kong, while Mitsui O.S.K. Lines gained 0.7% in Tokyo. Neptune Orient Lines surged 5.7% in Singapore and Cairn India rose 1.3%, while Shipping Corp. of India advanced 1.8%.

Shares of Nissan Motor rose 2.5% on a Nikkei newspaper report it was aiming to develop its own technology for hybrid vehicles and plans to launch a hybrid minivan in Japan in 2011.

NEC Corp. sank 8.9% in Tokyo after the Yomiuri Shimbun reported it was looking to raise capital. NEC said in a statement there was no truth to the report it had made such a decision, though a person familiar with the matter told Dow Jones Newswires that NEC was currently considering raising capital to strengthen its finances.

Technology stocks were leading in Korea with LG Display gaining 2.3% after reporting better-than-expected second quarter earnings and an upbeat outlook.

Currency market trade was choppy. There was a mild inclination to buy the safe-haven Japanese yen on the Jakarta explosions, though Asian currencies generally held up fairly well.

The euro was at 132.27 yen, from 132.63 yen in late New York trade, with the dollar at 93.73 yen from 93.75 yen. The euro was at $1.4108, from $1.4145.

Spot gold was bid at $935.10 a troy ounce, down $2.90 cents from late New York. August Nymex crude oil futures were at $61.72 a barrel on Globex, down 30 cents from New York.

-Dow Jones Newswires; +65-6415-4140; markettalk@dowjones.com

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(END) Dow Jones Newswires

July 17, 2009 05:48 ET (09:48 GMT)


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