Asian Markets Update: Japanese Stocks Shrug Off Obuchi News
TOKYO -- Monday brought drama of several kinds to the markets in Tokyo, encompassing a sick Prime Minister, improving business sentiment and a plunging currency. Things could get even more volatile Tuesday.
Stocks were pulled in various directions as the
Bank of Japan
reportedly intervened to weaken the yen after its surge on Friday and as reports filtered into the market of a stroke suffered Sunday by
Prime Minister Keizo Obuchi
. News of Obuchi's illness did not move the market much today, but it may affect equities tomorrow as late-breaking news says he is currently in a coma.
The
Nikkei 225
stock index climbed 389.67 points, or 1.9%, to 20,726.99, while the
Topix
index, which includes all shares listed on the
Tokyo Stock Exchange's
first section, rose 26.51, or 1.6%, to 1732.45. The
Jasdaq
small-cap index fell 5.42, or 5.0%, to 103.54, while the Nikkei
over-the-counter
TheStreet Recommends
shares lost 52.67, or 2.3%, to 2214.54.
News of Obuchi's stroke hit the papers over the weekend, saying the premier had become exhausted after meeting with senior officials of the
Liberal
and
New Komei
parties, both coalition partners in his ruling
Liberal Democratic Party
government. Only after the market closed today did a report surface that Obuchi was in a coma, a development some analysts believe will hurt the market tomorrow.
Monday's trading was dominated by what investors took to be positive news: the BOJ's
tankan
survey of corporate sentiment, which showed a more upbeat feeling toward corporate and economic conditions by planning managers around the country. The "diffusion index" for large manufacturers was -9, in line with market expectations, and a marked improvement from the -17 logged in the previous survey last quarter.
The BOJ, under instructions from the
Ministry of Finance
, reportedly intervened today to weaken the yen, which surged from around 102-105 to the dollar on Friday. A high yen makes Japanese exports more expensive overseas. The greenback fell to around 105.11 yen before trading migrated from Tokyo to London.
Dealers at domestic securities firms were shedding tech shares and favoring blue-chips.
Sumitomo Bank
(SUBJY)
rose 97 yen, or 6.3%, to 1627,
Sanwa Bank
(SANWY)
climbed 41, or 3.8%, to 1109, while
Hitachi
(HIT)
gained 65, or 5.3%, to 1284. Tech shares took a major beating.
Yahoo! Japan
slipped 7 million, or 11.2%, to 55.3 million while
Trend Micro
(TMIC)
tumbled 1900, or 10.6%, to 16,100.
Sony
rose 500, or 3.5%, to 15,000 after
Warburg Dillon Read
raised its rating on the company from buy to strong buy.
Hong Kong's
Hang Seng
index fell below what some in the market think is an important psychological level, 17,000. It closed down 513.61 points, or 3.0%, to 16,892.93. With Japanese tech shares getting pummeled, many of Hong Kong's high flying tech shares issues fell right along, with
Tom.com
slipping HK$1.80, or 16.7%, to 9.00.
The market was also negative on news that
HSBC
(HBC)
, the world's second largest bank, was buying France's
Credit Commercial de France
for $10.7 billion. HSBC is offering to pay more than three times book value for CCF, far more than a competing bid by CCF's 19% owner, Dutch bank
ING
. HSBC closed down HK$3.50, or 3.9%, to 87.50.
