Relieved by an overnight recovery on Wall Street, Asian markets bounced back on Thursday from their previous day’s plunge amid easing concerns about a slowdown in the United States economy.
Investors who had dumped stocks a day earlier in the wake of sharp decline in the US market snapped up shares in a broad rally that stretched across most markets from Japan to India.
Tokyo’s benchmark Nikkei 225 index gained 183,50 points, or 1,1%, to 16 860,39 points, a day after sliding 2,92%. Hong Kong’s Hang Seng Index advanced 132,51 points, or 0,7%, to 18 969,44 after sliding 2,6% on Wednesday.
The rebound in Asia came as US shares steadied in New York and closed with a slight advance. The Dow Jones industrial average rose 57,44 points, or 0,48%, to 12 133,40.
Investors in Asia closely watch Wall Street because the US economy is a huge export market for the region. But some analysts were warning of a rough ride ahead because of more volatility in US markets and other factors.
”The Nikkei is very likely to get back to 17 000 soon … but the next few months could well be volatile and corporate earnings in April are going to be important,” said Toshihiko Matsuno, assistant general manager at SMBC Friend Securities.
Wednesday’s tumble was sparked by problems emerging among US subprime mortgage lenders, who provide mortgages to people with poor credit. While these lenders make up a small part of the US economy, their difficulties raised concerns about the housing market and the outlook for the broader American economy.
But with Wall Street’s recovery, investors scooped up shares that had fallen to attractive levels.
In India, where shares sank 3,5% on Wednesday, the 30-share Sensex index was up 1,3% in afternoon trading, led by gains in banking and technology shares.
In South Korea, stocks were boosted by bargain hunting and advances in neighbouring markets. The Korea Composite Stock Price Index, or Kospi, closed up 1,4% at 1 426,93. Shares were down by 2% the day before.
”Today’s rebound was largely technical and the market is likely to take a cue for tomorrow from the US markets’ overnight performance,” said analyst Yang Chang-Ho at Hyundai Securities.
Chinese stocks have played a key role in influencing global markets in recent weeks. Two weeks ago, Chinese shares plunged nearly 9%. That triggered a week-long sell-off worldwide driven by concerns about a US slowdown and that stock prices were overvalued.
On Thursday, Chinese shares also rebounded as investors bought into companies with stakes in domestic banks and brokerages, which are expected to pay good dividends in a strong economy.
The benchmark Shanghai Composite Index ended up 1,6% at 2 951,70, recovering most of Wednesday’s 2% loss. ”We are optimistic on China’s economic outlook in 2007 and thus bullish on corporate fundamentals. The government is unlikely to resort to aggressive measures that may result in an economic turnaround,” said Zhang Yidong, an analyst at Industrial Securities.
Singapore’s main index rose 1,36%, while Australian shares rose nearly 2%.
But Philippine shares bucked the trend on Thursday, slipping as investors hunted for bargain stocks. The benchmark 30-company Philippine Stock Exchange Index fell 30,67 points, or 1%, at 3 043,61, adding to Wednesday’s 3,4% loss. — Sapa-AP