Markets in Asia ended the week on an upbeat note, with all major indices finishing in the green and the Hang Seng closing at a two-month high.
The week marks a continuing trend of buying in Asia after last week's big rally in equity prices, although trading volumes still remain low. In Hong Kong, market turnover was HK$77.14 billion ($9.9 billion) vs. around HK$90 billion ($11.6 billion) in the previous week.
"This week the market has been trading within a very narrow range, up only 1.7% from the previous week," says Alex Tang, head of research at Core Pacific Yamaichi in Hong Kong. "The major gainers are the Chinese financial institutions, which are rumored to be looking into buying some smaller local Hong Kong banks."
The Shanghai Composite Index rose 21 points, or 0.6%, to 3492.89, and in Hong Kong, the Hang Seng gained 480 points, or 2%, to 24,667.79. In Japan, the Nikkei leapt 378 points, or 2.9%, to 13,323.73.
China Watch: Copper's on Fire
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China raised its GDP growth forecast for 2007 by half a percent, to 11.9%. Official figures are due to be announced next week.
Leading gainers were Chinese momentum red chips, such as
China Life Insurance
. PetroChina rose 2.8%, to HK$10.36, shrugging off Citigroup's downgrade to "sell" Thursday. The bank cited further earnings disappointments, a widely contested prediction among other analysts and brokers. China Mobile jumped 2.6%, to HK$130.80, and China Life Insurance gained 2.7%, to HK$30.35.
Financials were surging, as one of the few sectors receiving heavy buying.
Bank of China
climbed 3%, to HK$3.77, and
Industrial & Commercial Bank of China
added 2.8%, to HK$6.15.
rose 0.6%, to HK$132.80.
China Construction Bank
gained 2.8%, to HK$6.71, and announced after market hours that it increased net profit for the second half of 2007 by 51%, to 23.1 billion yuan ($5 billion) on higher lending margins and its asset management division.
In Japan, investors in
were not so lucky. The bank said that its net profit for the fiscal year 2007 dropped 50%, to 310 billion yen ($3 billion) due to subprime losses. Analysts estimated the company would make 369 billion yen ($3.64 billion), the second revised-down figure this year. Mizuho soared 5.2%, to 407,000 yen, as investors viewed the earnings a near-miss from expectations. The sharp gains may indicate a slight pull-back in ADRs, however, as investors take stock of subprime woes.
In currencies, the Chinese yuan weakened slightly vs. the dollar, to 7.01, after opening at an all-time high of just below 7 yuan in morning trading. The dollar began the Asian trading session above the recent 102 yen benchmark, but fell to 101.25 yen by the end of the day.
Japanese exporters, which benefit from a weaker yen, held up despite the rise in the currency.
gained 0.2%, to 55,500 yen, as investors continued to show enthusiasm for Mario Kart, a popular game which was released for the Wii in Japan Thursday, and is due to be released for the console in Europe and the U.S. later this month.
"Mario Kart is always successful, whatever the format," says Charles Puntratanamongkol, a prominent entrepreneur and consultant in Bangkok. "Nintendo
stock should be doing better than it is right now."
Among other exporters,
rose 2.4%, to 4240 yen, and
advanced 0.8%, to 4850 yen.
Elsewhere in Asia, markets were posting strong gains, though trading volumes were thinner than average. The Taiwanese Taiex rose 0.9%, to 8909.58, and the South Korean Kospi gained by the same percentage, to 1779.71. In India, the Bombay Sensitive Index added 0.7%, to 15,807.64.
Be sure to check out the Far East Portfolio at Stockpickr.com to find out which Indian and Chinese companies are making big moves and announcing major news.
Daniel M. Harrison is a business journalist specialising in European and emerging markets, in particular Asia. He has an MBA from BI, Norway and a blog at
. He lives in New York.