Asia stocks revive on bargain huntingOctober 28th, 2008 - 5:55 pm ICT by IANS
Hong Kong, Oct 28 (DPA) Asian markets rebounded as investors hunted for bargains Tuesday, with Hong Kong making the greatest recovery of more than 14 percent just a day after seeing their worst one-day fall for 11 years.The blue-chip Hang Seng Index climbed 1,580.45 points, or 14.35 percent, to close the day at 12,596.29 points, recovering all its losses from Monday in one of its biggest one-day rallies ever.
Turnover was 66 billion Hong Kong dollars ($8.51 billion) and the scale of the recovery forced the stock market to issue a statement saying the “unusual” activity appeared legitimate.
The surge in share prices, driven by bargain hunters, came after shares plummeted by 12.7 percent Monday, their biggest one-day fall since the height of the Asian economic crisis in October 1997.
Tokyo stocks rebounded from a 26-year low as the yen fell against the dollar and euro and the government instituted new restrictions on short selling.
The benchmark Nikkei 225 Stock Average soared 459.02 points, or 6.41 percent, to close at 7,621.92, nearly erasing all of its 486.18-point loss from Monday.
The broader Topix index of all first-section issues also was up 37.57 points, or 5.03 percent, at 784.03.
The gains ended a four-day losing streak, which wiped out nearly a quarter of the Nikkei’s value.
The day began on a sour note, as the Nikkei briefly dropped below 7,000, but investors returned to the market to buy up stocks trading at historic lows.
Confidence was also boosted by a ban imposed by the government on naked short-selling as it sought to stabilize Asia’s largest bourse after similar crackdowns in the United States, Australia and some European markets.
Short-selling involves borrowing shares in the hope of buying them back later at a cheaper price to make a profit. With naked short-selling, traders sell stocks before even borrowing them. They do not deliver them to the buyers right away and instead wait until the price drops to purchase the shares and then hand them over to the
Naked short-selling raises fears that markets would be flooded with sell orders that would drive down prices.
The short-selling ban was to be imposed Nov 4, but the government brought it forward after the Nikkei’s plunge Monday to help calm the domestic market, Finance Minister Shoichi Nakagawa said.
The Nikkei has fallen 50 percent this year and is set for its worst-ever annual performance.
In Seoul the shares jumped more than 5 per cent, however South Korea’s currency lost further ground against the dollar with the US dollar quoted at 1,467.80 Korean won, after 1,442.50 won Monday.
The benchmark Kospi index soared 52.71 points, or 5.6 percent, to close at 999.16. Advancing issues outpaced decliners 624 to 230. The main index of the technology-heavy Kosdaq market rose 11.24 points to 272.43.
Chinese shares rose 2.81 per cent on Hong Kong’s rebound. The benchmark Shanghai Composite Index gained 2.81 percent, or 48.47 points, to close at 1,771.82. The Shenzhen index rose 2.73 percent, or 156.31 points, to close at 5,891.12 points.
Taiwan stocks rebounded to post gains of 0.76 percent Tuesday, after a steep opening fall of nearly 6 per cent in early morning trading.
The New Zealand and Australian stock markets lagged behind the rest of the region.
The benchmark NZX 50 index was down 91 points, 3.3 percent on Friday’s close to 2,687, having dropped from 4,215 points a year ago, a fall of more than 35 per cent. The market was closed Monday for a public holiday.
Australian stocks recovered from early losses with the ASX 200 losing just 14 points, after being down more than 60, to close just 0.3 percent down.