Currency woes upstage US scandals

ASIAN stocks showed resistance to the pandemic of US accounting scandals today, despite drugs giant Merck joining the list by admitting that a subsidiary company exaggerated revenue. While some technology stocks were rocked by Nasdaq's rapid 2.95% reverse, a fall of more than 1% on Wall Street had little impact on the region.

Currencies remained a bigger issue, as the US dollar rose against the Japanese yen after threats that the Tokyo government was preparing an onslaught on foreign exchange markets to push their currency down. The Nikkei 225 regained some of its zest of earlier this month and closed 191.05 points up at 10,960.25, more than reversing Monday's falls which followed predictions by ministers that the yen was destined to strengthen further.

Hopes of a weaker currency lifted export stocks. Toyota was up 1%, while rival car maker Nissan did slightly better. Rises in consumer goods makers were led by a 1.5% gain by Canon.

South Korean shares moved up strongly, but not strongly enough to break back through the 800 level the Kospi reached in intraday trading on Monday. In mid-afternoon trading the index was up 14.5 points to 797.85.

Like Japan, South Korea is having to face up to a pumped-up currency. The won is at a 19-month high, having put on 10% this year against the US dollar. The gain has profited international investors as the Korean market has risen 27% in US dollar terms this year, while it has added only 14% for domestic investors.

Some exploratory buying of blue-chips underpinned Hong Kong's market, and the Hang Seng index gained 9.3 points at 10,812.75. Trading was subdued ahead of the upcoming listing of shares in Bank of China (Hong Kong), the year's biggest issue, which is expected to suck cash out of the market. Shares in HSBC Holdings added 50 cents to HK$90.75.

Taiwan's recent ascent, which has taken share values up by nearly 9% in a week, faltered on profit-taking, and uncertainty on the outlook for technology stocks after Nasdaq deflated overnight. Led by Taiwan Semiconductor, the Weighted Average slipped 27.2 points to 5350.59.

Revived talk that National Australian Bank was planning a swoop on Britain's Abbey National generated fresh excitement in Sydney, where the All Ordinaries index was up 24.3 points at 3205.4 at the close. NAB shares, which rose more than 3% on Wall Street overnight, strengthened a further 1% on prospects of a merger. News Corporation shares also boosted the market as they climbed back from their recent long-term lows on bargain-hunting, and advanced 2%.

Singapore stocks shook off Wall Street's fall, and the Straits Times index edged up 2.23 points to 1623.51. Singapore Telecom was an exception, and eased back after the UK's Virgin Group announced it was pulling out of its local mobile phone joint venture after only eight months, complaining about poor markets.

Malaysian stocks perked up after recent profit-taking and the Kuala Lumpur Composite index rose 1.95 points to 737.73, while Thailand's SET index was off 0.52 at 398.23 in thin trade. Indonesia's Jakarta Composite index gained a mere 0.03 at 484.65.

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