Asian stocks shake off US plunge

ASIAN investors refused to jerk their knees to Wall Street's latest moves. While US stocks continued to plunge overnight, Far East markets appeared to be marching to a different drum.

Trading was bumpy but most markets moved into the black, in contrast to the near-3% slump by the Dow Jones Industrial Average, Nasdaq's 2.5% dive and the 3.3% decline in the Standard & Poor's 500.

Tokyo's Nikkei 225 Average shook off early losses and was up 26.62 points to 10,215.63. South Korea and Taiwan added more than 1% while a similar percentage gain in Hong Kong took the Hang Seng index up 203.6 to 10,313.9.

Among the short-term factors providing support was the bounceback by the US dollar against other major currencies as buyers moved in for US Treasuries. The greenback's rally offered respite to Asian exporters who have had their price advantages whittled away this year by the steady slide of the greenback against the yen, Taiwanese dollar and South Korean won.

As the yen rallied, early falls in major exporters such as Honda and Toyota were reversed or heavily pared as buyers judged the falls of up to 30% from the year's highs had been overdone.

There were also signs that some Asian governments were prompting state-linked pension funds to underpin the market. In Tokyo traders reported heavy buying of futures by pension funds after the Nikkei had dipped below 10,000 yesterday morning.

Korean funds were also said to have been mobilised by the government to stop the slide in the Kospi.

Asian investors were querying the need for local stocks to follow America's markets with their self-inflicted wounds caused by domestic accounting scandals and overblown earnings estimates that have failed to match reality. The Asian crisis of 1997 had already burst Asia's stock market bubble, and while many markets have shown remarkable strength this year, analysts say that the recovery came from such a low base that stocks in the region are still generally undervalued.

ING Barings argues that Thailand, Malaysia, the Philippines and Indonesia still represent good value for money compared with US and European markets.

Hong Kong investors appeared to have drawn a line in the sand at 10,000 on the Hang Seng. Early selling saw it dip below the figure but some late-morning buying of blue-chips spurred the strong recovery. HSBC Holdings, a recent heavy loser, rallied 75 cents to HK$87.25.

Early pressure on tech stocks following Nasdaq's fall hurt Taiwan and South Korean counters in early trades, but bargain-hunting and some government help saw South Korea's Kospi rally 12.92 points to 733.82, while Taiwan's Weighted Average put on 76.62 points to 5120.12.

Singapore's recently battered technology stocks also improved, and the Straits Times index firmed by 21.1 points to 1557.2. In Sydney, the All Ordinaries rose 54 to 3088.6.

Malaysia's Kuala Lumpur Composite added 4.82 points to 721.39 and Thailand's SET index put on 2.51 points to 385.58 but the Composite index in Jakarta weakened 0.2 to 475.07.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.