Asian stocks ride see-saw over Wall Street dive, rate cutsNovember 7th, 2008 - 5:23 pm ICT by IANS
Tokyo, Nov 7 (DPA) Asia-Pacific stocks ended the week mixed as Wall Street’s overnight plunge prompted investors to sell but interest-rate cuts in some markets led to afternoon recoveries.Japan’s benchmark Nikkei 225 Stock Average plunged 3.55 percent on Toyota Motor Corp’s sharp cut in its earnings forecast for this fiscal year, but South Korean and Hong stocks took big jumps on the rate cuts.
The Nikkei was the region’s big loser as it shed 316.14 points to close at 8,583 but still managed to end the week up 0.07 percent.
Tokyo’s broader Topix index of all first-section issues was also down for the day by 3.33 percent at 879 but up for the week at 1.35 percent.
The Tokyo indices fell for the second day in a row as a series of Japanese exporters have lowered their earnings forecasts amid the worldwide economic slowdown.
Toyota Thursday reduced its operating income projection to 600 billion yen ($6 billion) for the year that ends March 31, down 73.6 percent from the previous year.
A different story was playing out in South Korea, where the benchmark Kospi index rose 3.9 percent to 1,134.49 after South Korea’s central bank lowered its key interest rate by a quarter of a percentage point to 4 percent in a bid to calm market turmoil and boost the economy.
The same scenario played out in Hong Kong, where the blue-chip Hang Seng Index gained 3.29 percent to close at 14,243.43 despite falling more than five percent in morning trading and seven percent Thursday.
The recovery was fuelled by unexpected announcements of cuts in interest rates by the HSBC and Standard Chartered banks, which investors hoped would free up credit in the city.
The Hong Kong Monetary Authority has eased base rates three times in line with the US Federal Reserve since March, but local banks till Friday had left lending rates unchanged.
Australia’s ASX 200 index, however, followed Wall Street’s lead, falling 2.3 percent to end at 4,149.
Further news Thursday of heavy job losses in the US economy sent the blue-chip Dow Jones Industrial Average down 4.85 percent and the broader Standard and Poor’s 500 Index down 5.03 percent.
Taipei’s Taiex index also took Wall Street’s lead in the morning when it fell 4.34 percent shortly after opening before it recovering as government funds entered the market and the South Korean market surged.
It ended the day 1.03 percent higher at 4,742.33.
Westpac currency strategist Robert Rennie said the slowdown in the United States was bearing down on other markets around the world.
“When you look out the windscreen and see what’s coming towards you in the US, it really feels as if it could be truly horrible,” he told The Sydney Morning Herald.
China’s mainland indices rose with the Shanghai Composite Index up 1.75 percent to 1,747.71 and the Shenzhen Composite Index 0.94 percent higher at 467.35.
Trading in South-East Asia was mixed with indices in Singapore and Indonesia up and in Thailand, Vietnam, Malaysia and the Philippines down.