Asian markets rebound from lows
Asian markets ended mixed on Thursday, rebounding from early lows that came after another steep loss on Wall Street and amid persistent worry over the likely impact of a US recession.
Hong Kong’s Hang Seng Index fell 3.5 per cent at 21,108.2, after dropping as much as 4.4 per cent in morning trade.
In Shanghai, the recovery was more dramatic: The Shanghai Composite Index closed 1.1 per cent higher at 3,804.1 after having plunged 6.5 per cent in morning trade to hit its lowest level since last June.
But trading was subdued without the lead of Asia’s largest bourse in Tokyo due to a national holiday in Japan. Financial markets were also closed in India, Indonesia, Malaysia, Pakistan and the Philippines.
Investors continue to worry about the world’s financial system and the state of the US economy, a vital export market for Asian companies.
“Until the US market becomes stable, the Hong Kong market is not likely to consolidate its upward trend,” said Castor Pang, an analyst at Sun Hung Kai Financial.
In the US on Wednesday, talk swirled about whether further write-downs from financial institutions are in the offing after Merrill Lynch & Co filed a lawsuit against a company involved in a debt transaction with the investment bank.
The Dow Jones industrial average fell 2.36 per cent to 12,099.66 – just a day after it surged 3.5 per cent.
Investors have seen advances evaporate many times during the course of the credit crisis. After the big rise following the US Federal Reserve’s interest rate cut Tuesday, many wanted to preserve their gains and that led to Wednesday’s sell-off, analysts said.
In China, financial stocks bounced back after falling early in the day.
Industrial & Commercial Bank of China gained 2.1 per cent after slipping 2.8 per cent in the morning; China Life Insurance closed 0.2 per cent lower after dropping as much as 5 per cent.
PetroChina, which accounts for about a quarter of the Shanghai index’s value, plunged 6.73 per cent in the morning but closed just 2.3 per cent lower.
However, analysts were cautious.
“Don’t expect too much out of this rebound. Market sentiment is still quite dismal,” said Wei Daoke, a senior analyst at Shenyin & Wanguo Securities Research Institute.
The Shanghai benchmark is still down about 28 per cent so far this year.
In Australia, the S&P/ASX 200 index fell 3.1 per cent, while in New Zealand the NZX-50 dropped 1.2 per cent.
Financial stocks in Taiwan led the benchmark there to a 1.9 per cent gain. South Korea’s composite index in Seoul eked out a gain of 1.16 points after dropping nearly 2 per cent in the morning. (AP)
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