Rate decision hits Aussie miners

IT WAS a day of mixed fortunes in Asia as a sizzling Australian dollar meant bad news for the country's equity market, but Tokyo and other centres continued their powerful upwards run on recovery hopes.

The Australian central bank's decision to leave interest rates unchanged at 4.75% triggered a jump in the currency to 67.81 US cents, its best since March 1998. The no change decision by the Reserve Bank of Australia leaves a yawning 3.75 percentage points gap with the key US rate.

Shares of key resource companies were depressed by the buoyant currency. BHP Billiton was off 19 cents, or 2.2%, at A$8.37 while Rio Tinto, eased 53 cents to A$28.12, a fall of 1.85%.

Commodities traded by the mining duo are costed in US dollars, which means their earnings when converted into the Australian dollar are likely to dip should such currency trends persist. Their stock market slide undermined the All Ordinaries index, which slid 11.1 points to 3027.5, down 0.37%.

Aristocrat, the leaderless manufacturer of gaming machines which has been the focus of reverse takeover talk, said it would still take time to find a new chief executive, although several candidates had been assessed. Its shares added two cents, or 1.49%, to A$1.36. Two weeks ago, founder Les Ainsworth, whose family controls 40% of the stock, said he may try to buy the company, which has been rattled by profits warnings.

The world's number two maker of slot machines ditched its chief exec and chief financial officer in April as problems mounted, especially in its US operations.

In Tokyo, the bulls enjoyed a field day on strong follow through buying after yesterday's better-than-expected quarterly Tankan business sentiment survey.

Fired up by hopes the country's economy may have turned the corner, the Nikkei 225 Average posted its biggest gain in seven months, soaring 313.75 points, or 3.4% to close at 9592.24.

Banks again led the charge. Mizuho, the world's largest lender by assets, vaulted 16,000 yen or 15.5% to 119,000, while Sumitomo Mitsui Financial jumped 18,000 yen or 6.5% to 295,000. Rounding out advances for Japan's Big Four, UFJ surged 30,000 yen to 226,000, better by 15.3%, and Mitsubishi Tokyo Financial firmed 29,000 yen, or 5.3%, to 574,000.

Tech shares were also winners, encouraged by overnight gains posted by US counterparts on the Nasdaq. Chipmaking giant NEC rose 38 yen, or 5.75%, to 699, while computer manufacturer Fujitsu added 22 yen to 522, a 4.2% gain. Like the banks, they extended gains made earlier this week.

Singapore shares also had a firmer tone, on hopes for a recovery in the US, its main export market. Investment bank ING, which recently warned that Asian markets were set to consolidate this month, said today the Straits Times index could top 1680 by the year-end.

Today, the benchmark was ahead 4.9 points, or 0.3%, at 1462.09. United Overseas Bank rose 10 cents to S$12.60, a 0.8% advance, after saying it had been granted permission to expand its China business.

It was a similar story in Taiwan as tech plays pushed higher on recovery hopes. With the Weighted index up 77.92 points, or 1.5%, at 5095.7, AU Optronics, the flat-computer screens maker, jumped by its maximum daily limit - T$1.60, or 6.7%, to T$25.40.