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Asian Markets Update: Japanese Banks Help Stocks Rebound

In Hong Kong, dotcom IPO frenzy pushes up the Hang Seng.

TOKYO -- Japanese Retail investors hunting out bargains helped the key

Nikkei 225

index erase early losses on Wednesday, but sentiment remained weak in Tokyo as institutional investors continued to shed stakes in large tech stocks and blue-chips.

With the end of fiscal 1999 coming March 31, the unwinding of cross-shareholdings in large-cap shares is expected to bog down Japanese equities for another few weeks, traders agreed.

The Nikkei 225 stock index rose 128.97 to 19,519.55, while the


index, comprised of shares listed on the

Tokyo Stock Exchange's

first section, climbed 22.65, or 1.4%, to 1667.24. The


small-cap index fell 1.61, or 1.3%, to 122.24, while Nikkei


shares slid 11.47 to 2629.09.

After several weeks of steady decline, bank shares rose on retail buying interest, despite the likelihood of a new tax on Tokyo's largest banks. The Tokyo metropolitan assembly started debate on a new tax bill today, which would levy a 3% tax on gross operating profits of banks over the next five years. Fears of the tax had driven banks lower recently.

Although the national government is vehemently opposed to the new tax, local reports say the bill will likely be passed by the end of March, and come into effect April 1. The

Bank Tokyo-Mitsubishi

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rose 34, or 2.6%, to 1329, while the

Industrial Bank of Japan


jumped 67, or 8.7%, to 837.

Large technology stocks were mixed.



rose 250, or 1.4%, to 18,150,



climbed 62, or 3.3%, to 1934, while


(SNE) - Get Sony Corp. Report

fell 350, or 1.25, to 30,000.



declined 35, or 1.5%, to 2335 and



tumbled 60, or 1.8%, to 3340.

One shining star was


, which jumped 200, or 5.5%, to 3810 on news that the firm plans to attach its I-mode Internet service to all of its mobile phones starting this summer.

In currency dealings, there was little change in the greenback against the yen, with the dollar hovering around 110.30 yen. However, dealers noted investors were increasingly favoring the euro over the dollar, due to the recent volatility in the U.S. equity market.

"With many investors suspecting the Dow (Jones Industrial Average) to crumble sooner rather than later, the favorite of the moment is the euro," noted Arihide Kato, currency salesman at the

Bank of America

. "Since the euro managed to bounce back after testing parity (against the dollar), it's also much easier for investors to take long positions."

A hot public offering from a Hong Kong web portal owned by two blue-chip companies helped lift the key

Hang Seng

index by 121.62 to 16,376.79.

, a web portal jointly owned by

Hutchison Whampoa



Cheung Kong

, which are controlled by tycoon Li Ka-shing, looks to be more than 1000 times oversubscribed, local wires said.

There were reports of backlogs at key subway stations as thousands of retail investors rushed to hand in their IPO applications by the noon deadline today. offered 428 million shares with an overall allotment option of 64.2 million shares, at 1.78 per share. Hutchison jumped 4.50, or 3.9%, to 121.50, while Cheung Kong climbed 4.00, or 4.0%, to 103.50.

Shares of

Pacific Century Cyberworks

fell 1.15, or 5.1%, to 21.40, a day after the firm said it would bid alone for

Cable & Wireless HKT


. Pacific Century is reportedly arranging a loan of $10 billion to help finance the takeover, since Cable & Wireless is unlikely to accept only shares from a company with no operating profit. C&W HKT, which is in merger talks with

Singapore Telecommunications

also slid 0.55, or 2.2%, to 24.25.