US rate hopes halt losing streak

A SENSE of deja vu spread across Asian markets today, bringing to a halt a week of heavy losses as hopes of lower interest rates offset concerns about the slowing economy. The last round of axe-wielding by the US Federal Reserve Board was good for Asian investors, whose stocks outperformed global markets. Now they are hoping for a repeat after the recent shake-out.

Markets around the region jumped by up to 3%, spurred on by talk of further cuts as the US tries to head off a double-dip recession, and lifted by Nasdaq's overnight 4.4% bounce. Network giant Cisco rode to the rescue of technology stocks in the US and Asia by reporting sales running at their fastest clip in 18 months.

Hope that Fed chairman Alan Greenspan will revive American consumers' urge to spend by lowering the cost of money lifted major exporters and chipmakers.

In Tokyo the Nikkei 225 broke a five-day losing streak that had take it within sight of 18-year lows, and rallied 333.38 to close at 9834.4. Stocks of leading consumer electronics groups, component makers and motor manufacturers led the charge, Sony surging more than 5%.

Toyota shone among carmakers ahead of its first-quarter results due today. Buoyant sales in the US are expected to have generated a 25% increase in the quarter's earnings, and the shares added almost 4% in anticipation.

Interest-rate hopes also took Hong Kong stocks up for the first time in five days, the Hang Seng index putting on 192.12 points at 9892.81. Hong Kong's economy needs all the help it can get as domestic factors continue to implode. Retail sales plunged 7.7% in June as unemployment reached record levels. The link of the local dollar to the greenback means that local interest rates instantly follow those in the US, and any cuts would be welcomed by struggling consumers, property owners and developers.

Banks gained, with HSBC Holdings up HK$1.75 to HK$86.50 as most analysts welcomed this week's interim results. Merrill Lynch, however, concluded that the earnings were already in the price.

An easing of tensions between Taiwan and China after recent hawkish remarks on the island's independence, plus a boost from the global recovery in technology counters, lifted Taipei's market more than 3%. The Weighted Average soared 160.91 points to 4733.26, led by a near 7% surge in the shares of chip giant Taiwan Semiconductor.

Hopes that a floor has now been built under microchip prices lifted South Korea's Kospi 9.07 points to 682.85, the first rise in five days. Singapore's Straits Times index was powered 22.08 points ahead to 1488.83 by strong rises in stocks of companies with big exposure to the US computer market.

In Sydney, recently sagging resource stocks perked up on hopes that the global economy will continue to recover, and the All Ordinaries index closed 61 points up at 2998.8. BHP Billiton and Rio Tinto each put on 5%. AMP pulled back almost 4% of its recent losses while News Corp followed its US quote with a 6% rally.

Malaysian stocks firmed, the Kuala Lumpur Composite index gaining 2.31 points to 721.49. Thailand's SET index added 3.34 points at 366. In Indonesia, the Jakarta Composite index gained 6.46 points to 447.39.

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.