Asian Markets Update: Markets Start Week Strong on Tech Shares
TOKYO -- Asian equity markets started the week on a solid footing, as investors slowly bought back key tech shares they had been selling off the past few months.
The
Group of Seven
finance ministers' meeting held over the weekend in Japan delivered little in substance, but with the late-July G8 summit (dubbed the Information Technology summit, some traders said the overabundance of IT-related headlines actually may have helped sentiment in the Tokyo tech sector Monday.
The
Nikkei 225
index rose 174.44, or 1.0%, to 17,572.68, while the
Topix
index, which includes all shares listed on the
Tokyo Stock Exchange's
first section, climbed 16.53, or 1.0%, to 1613.89. The
Jasdaq
small-cap index gained 1.18, or 1.4%, to 88.41, while the Nikkei
over-the-counter
index rose 14.78 to 1805.44.
Tokyo traders predicted a very slow trading week, since investors are waiting around for next Monday's
TheStreet Recommends
Bank of Japan
monetary policy board meeting. The market is still very split on whether the central bank will lift the overnight call loan rate by 25 basis points or not. In the meantime, a mild tech rally has some traders hoping the Nikkei 225 will reach key psychological resistance of 18,000 this week.
The G7 meeting resulted in finance ministers agreeing to push for more cooperation in the IT sector, although they also warned that new innovations would not immediately result in a gain in productivity or higher living standards.
And with local papers packed with IT-related headlines, the market reacted with mild optimism. Large cap tech shares were mixed, with
NEC
(NIPNY)
rising 100 yen or 3.2%, to 3250 ($30.40) and
Sony
rising 200, or 1.8%, to 11,180.
Hitachi
(HIT)
fell 20, or 1.4%, to 1380, while
Fujitsu
gained 40, or 1.2%, to 3490.
Nippon Telegraph & Telephone
(NTT)
rose 20,000, or 1.3%, to 1.56 million as the market got excited over the possibility that the U.S. and Japan will strike a deal soon to lower the telecom monopoly's high interconnection fees. Talks between the two sides started today.
The greenback fell lower against the yen after Japan's May machinery orders jumped 4.5% from the previous month, much higher than the market's expectation of a 1.7% increase. The dollar recently fetched 106.90 yen.
Hong Kong's
Hang Seng
index jumped 408.71, or 2.4%, to 17,238.67 largely on a telecom sector rally.
Hutchison Whampoa
gained HK$1.00, or 1.0%, to 110.50 ($14.17) after reports suggested that it may buy out India's
Usha Martin Telekom
. If the buyout is approved, Hutchison would bypass India's stringent restriction on foreign ownership of state telecom companies.
China Mobile
(CHL) - Get China Mobile Ltd. Report
, formerly known as China Telecom, rose 1.75, or 2.4%, to 74.25, while
China Unicom
(CHU) - Get China Unicom (Hong Kong) Ltd. Report
gained 0.45, or 4.4%, to 10.80.
Korea's
Kospi
index climbed 9.73, or 1.2%, to 851.47, despite the possibility of an imminent banking sector strike. Bankers are not pleased with the government's recent proposals on banking sector reforms.
Elsewhere in Asia, Taiwan's
TWSE
index fell 18.41 to 8154.67.
