TOKYO -- Japanese shares managed to eke out gains Friday as the start of six new mutual funds this week had retail investors scrambling to pick up tech shares, hoping to see their picks matched by those of the fund mangers.
record breaking session overnight helped the Tokyo market, but domestic traders are still worried about the future of the
Dow Jones Industrial Average
, which closed 1.3% lower Thursday.
index rose 246.44, or 1.3%, to 19,817.88, while the
index, comprised of shares listed on the
Tokyo Stock Exchange's
first section, climbed 34.45, or 2.0%, to 1724.50. The
small-cap index fell 1.63, or 1.3%, to 123.24, while Nikkei
shares slid 20.55 to 2657.20.
"I expect the Dow to continue consolidating for the rest of the month," said Masaki Higashida, deputy general manager at
. "But even if U.S. stocks slide further, that will be canceled out in Japan by the strength of retail interest and the start of new mutual funds."
Tech and telecom shares fared well.
, after receiving the official go-ahead to start negotiations to buy the nationalized
Nippon Credit Bank
, climbed 2000, or 1.2%, to 168,000.
jumped 300,000, or 7.6%, to 4.23 million after
reiterated its buy rating on the company today. Goldman's 12-month price target is 4.34 million.
rose 880, or 2.9%, to 30,850,
climbed 130, or 3.8%, to 3530, while
inched 15 higher to 2390.
Fears of a slow-down in the Japanese economy had investors favoring the dollar over the yen. Although the figure for the fourth-quarter gross domestic product won't be released until the end of March, both government and private sector estimates predict a significant downturn in GDP, which means Japan will technically fall back into a recession since the economy shrank in the third quarter.
Compounding investors' fears was a comment from
Economic Planning Agency
head Taichi Sakaiya today, who said although Japan was not in a deflationary scenario, fears of deflation still exist. The greenback is currently trading around 110.88 yen.
Meanwhile in Hong Kong, talk that
Pacific Century Cyberworks
could possibly out-bid
for phone company
Cable & Wireless HKT
helped the Hang Seng index climb 142.32 to 17,200.98. PCCW shares were suspended from trading, when the firm said it was ready to "issue an announcement in relation to C&W HKT on Monday."
Dow Jones News wires reported that C&W HKT's parent, the U.K.'s
Cable & Wireless Communications
was ready to sit down and mull over PCCW's offer at a board meeting that was scheduled to start Friday morning. An immediate answer is not expected, however, since the meeting could last through the weekend, the wire service said. C&W HKT rose 0.75, or 3.0%, to 25.75, while
climbed 2.50, or 3.8%, to 68.50.
Bank and property shares were lower as investors were again concerned with the possibility of rising interest rates. Due to Hong Kong's currency peg to the dollar, a rate rise in the U.S. usually means rates go higher at home as well.
fell 0.75 to 89.50. The bank will release its fiscal 1999 earnings on Monday, which are expected to show a 23% increase in profits over the previous year.