Tokyo surges on bad loans leak

JAPANESE bank stocks surged today as investors bet that most of the bad-loan news was already in the price. Strong gains among top lenders reversed early falls in the Nikkei 225 Average, which at one stage threatened to send it below 11,000 for the first time since early March.

Other Asian markets continued to wilt after IBM's shock earnings warning dragged the Nasdaq down by 2.4% overnight.

In Tokyo, stock prices fought back to take the Nikkei up 104.09 points to 11,218.58. Investors were encouraged by leaked reports of Friday's survey of the country's bad- loan mountain, which will show that, while still horrendous, debt levels are in line with market expectations.

The unveiling of the extent of the problems for the first time is also seen as a positive move towards more transparency and action to tackle the problem. Top mover was Big Four member UFJ Holdings, which soared more than 8%, while the sector index gained almost 4% despite figures showing that corporate borrowers were still on strike.

Bank lending in March was down 4.5% year-on-year, a slightly slower fall than the previous month's 4.7% but still an extension of a trend that has lasted more than four years.

However, there were signs that attempts to pump up the money supply are beginning to bear fruit as the key M2 figure showed a 3.8% gain in the month.

Hong Kong's mild attempt at a rally yesterday quickly fizzled out as doubts over the US economic recovery hit shares of big exporters.

The Hang Seng index fell 90.6 points to 10,643.1, led down by micro motor specialist-Johnson Electric, which lost almost 3% on concern over its US sales.

Similar worries hit South Korean stocks and the former star market lost more than 3% as big computer and chip stocks tumbled.

In a fourth day of falls, the Kospi fell 32.64 points to 856.03. Daewoo Motors sales bucked the trend with an 8% surge after General Motors declared that all obstacles to its bid for parent Daewoo Motor had been overcome.

Nasdaq's fall meant no escape for Taiwan electronics shares, and the Weighted Average slipped 10.64 points at 6,059.21.

A sharper-than-expected 2.5% slowing of the Singapore economy in the first quarter hit blue-chips, and with technology stocks also under pressure, the Straits Times index tumbled 38.91 points to 1,715.35.

Australian investors snapped up bank stocks on the view that the economic recovery will not be so fast as to ratchet up interest rates, though the All Ordinaries closed 12.10 points higher at 3,327.20. National Australia Bank led with a rise of 1.5%, which partially reversed recent falls that followed plans to slash staff to curtail costs.

News Corp shares also showed signs of life in late morning trading although they were still a net 1% off on the day.

Indonesian stocks stood out with a rise of more than 1.5% as institutional investors continued to pick up blue-chips. The Jakarta Composite rose 13.807 points to 533.808.

In Thailand, the SET index edged up 1.81 points to 372.67, but the Kuala Lumpur index was 1.30 easier at 774.58.

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.