Asian stocks were little changed for the week as optimism faded that a US$700 billion US plan to rescue its financial system would be agreed by the US Congress.
“The assumption is that the bailout will take longer than expected, which is negative,” said Tsuyoshi Shimizu, a senior fund manager at Mizuho Asset Management Co, which oversees US$26 billion. “As with Washington Mutual, the longer it takes to pass something, the more victims we’re going to see.”
The MSCI Asia Pacific Index was barely changed at 113.77 this week. The gauge jumped 2.6 percent on Sept. 22 after the US government proposed buying bank assets and Australia and Taiwan restricted short selling. The index fell for the rest of the week as debates by lawmakers on the plan dragged on.
MSCI’s Asian index has dropped 28 percent this year as a US housing recession sparked a credit crisis.
Still, a measure of financial stocks gained after Warren Buffett’s Berkshire Hathaway Inc said it would buy US$5 billion of Goldman, Sachs & Co stock and Mitsubishi UFJ Financial Group Inc said it will purchase as much as 20 percent of Morgan Stanley.
Mitsubishi UFJ, Japan’s largest bank, advanced 8 percent to ¥931 (US$8.77). Nomura Holdings Inc, Japan’s biggest securities firm, soared 12 percent to ¥1,468 after agreeing to pay less than a month’s revenue for units of bankrupt Lehman Brothers Holdings Inc in Asia and Europe.
“It’s smart for Japan’s financial institutions to pick up assets at cheap prices and expand overseas,” said Roger Groebli, Singapore-based head of financial market analysis at LGT Capital Management, which oversees about US$20 billion.
Babcock & Brown, a manager of infrastructure assets, jumped 191 percent to A$2.31 (US$1.91), the biggest gain on MSCI’s Asian index. Babcock has blamed short sellers for sending its stock down 91 percent this year.
TAIPEI
Taiwanese shares are expected to fall next week amid concerns over the global financial system, dealers said on Friday.
Market confidence has been further undermined after the index fell below the key 6,000 point level on Friday with pessimism about the weakening domestic consumption due to the toxic Chinese milk product scandal, they said.
The market may test the nearest support at around 5,700 points next week, while any technical rebound is likely to boost the bourse to the 6,000 to 6,100 point resistance, dealers said.
For the week to Friday, the TAIEX fell 40.75 points or 0.68 percent at 5,929.63 after a 5.39 percent increase a week earlier.
Average daily turnover stood at NT$88.72 billion (US$2.77 billion), compared with NT$91.70 billion a week ago.
HONG KONG
Shares closed down 1.3 percent, dealers said.
The benchmark Hang Seng Index closed down 252.34 points at 18,682.09, following declines on other Asian bourses.
Turnover remained light at HK$54.99 billion (US$7.05 billion).
Dealers said they expect weak US stocks to weigh on Hong Kong’s blue-chip index in the near term as many investors will continue to stay on the sidelines rather than increase their exposure to the volatile market.
Bank of East Asia Ltd lost 11 percent to HK$25.85 after rumors about its financial stability spurred the territory’s first bank run in more than a decade. The bank said on Friday that operations were “returning to normal” after Financial Secretary John Tsang (曾俊華) said rumors were “unfounded” and Monetary Authority Chief Executive Joseph Yam (任志剛) pumped liquidity into the banking system.
TOKYO
Japanese share prices skidded 0.94 percent, dealers said.
The Tokyo Stock Exchange’s benchmark Nikkei-225 index lost 113.37 points to end at 11,893.16. The broader Topix index of all first-section shares dropped 6.06 points or 0.53 percent to 1,147.89.
“Investors can’t make any bold moves before the weekend amid uncertainties over the US bailout bills,” Traders Securities manager Tamotsu Numazaki told Dow Jones Newswires.
SYDNEY
Australian shares closed down 0.5 percent, dealers said.
The benchmark S&P/ASX 200 fell 22.6 points to close at 4,904.8 while the broader All Ordinaries slipped 26.2 points to end the week at 4,934.6.
Trading was thin amid the continued uncertainty from the US, with some 1.34 billion shares valued at A$6.33 billion (US$5.26 billion) changing hands. Some 428 stocks closed up, 574 down and 298 were unchanged.
SHANGHAI
Chinese share prices lost 0.16 percent, dealers said. They said buying interest was shrinking as investors were worried about continuing uncertainties in global stock markets this week, when the domestic market will be closed.
The gloomy outlook of corporate earnings also weighed on traders as most listed firms will begin releasing their third quarter earnings in the middle of next month.
Analysts said the third-quarter earnings were likely to be lower due to rising costs and a slowing economy at home and abroad.
The benchmark Shanghai Composite Index, which covers A and B shares, was down 3.72 points at 2,293.78 on turnover of 66.6 billion yuan (US$9.7 billion).
China’s CSI 300 Index jumped 8.2 percent, advancing for the first week in nine.
Haitong Securities Co and Citic Securities C, the country’s two largest brokerages, jumped after the Cabinet agreed to let investors buy shares on credit and sell borrowed stock to help develop the market, an official familiar with the plan said.
SEOUL
South Korean shares closed 1.68 percent lower, analysts said. The KOSPI index fell 25.3 points to 1,476.33. Volume was 495.69 million shares worth 4.27 trillion won (US$3.68 billion), with losers outpacing gainers 537 to 258.
SINGAPORE
Shares closed 1.34 percent lower, dealers said. The blue-chip Straits Times Index closed 32.78 points down at 2,411.46 on volume of 944.89 million shares valued at S$1.06 billion (US$742.58 million).
Declining stocks outnumbered risers 329 to 162, while 870 issues were steady.
BANGKOK
Thai share prices closed 0.35 percent lower, dealers said. The Stock Exchange of Thailand (SET) composite index lost 2.17 points to close at 618.97 points.
MANILA
Philippine share prices closed 1.2 percent higher, dealers said.
The composite index gained 30.86 points to 2,597.23.
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