BANGKOK, Thailand -- Asian markets ended the first trading week of 2008 in heavily volatile territory, with rising commodity prices pushing the Hang Seng higher, while the Nikkei plunged to its lowest level in 17 months.The Hang Seng rose 632 points, or 2.4%, to 27,519, and the Nikkei plunged 616 points, or 4%, to 14,691 in a scheduled half-day trading session. In China, the Shanghai Composite Index gained for the third consecutive day, jumping 41 points, or 0.8%, to 5,361. "Japan opened today for the first time in 2008, in a half trading session, and as such volume was extremely low," says Yoji Takeda, who manages $1.2 billion for RBC Investment Management Asia in Hong Kong. "There was a futures selloff, and that drives down the cash market. Japan is catching up with other markets that have fallen already this year," adds Takeda. Hardest hit in Japan were exporters and industrial stocks, such as Sony ( SNE) and Matsushita Electric ( MC). Sony plummeted 6.6%, to 5790 yen, while Matsushita dived 6%, to 2175 yen. Other exporters fared badly too. Nintendo ( NTDOY) lost 4.5%, to 63,500 yen, while Kobe Steel ( KBSTY) fell 4.7%, to 347 yen, and Canon ( CAJ) ended 5% lower, at 4940. Takeda points out that there may be value among these stocks now, which he says, "looks pretty inexpensive." Among Japanese megabanks, Mitsubishi UFJ ( MTU) lost 5%, to 995 yen, Mizuho Financial ( MFG) slipped 4.3%, to 51,100 yen, and Sumitomo Mitsui Financial ( SMFJY) fell 4.8%, to 592 yen.
The selloff in equities in Japan and the bullish momentum in Hong Kong prompted weakness in the yen, as the dollar was buying 109.40 yen by the end of Asian trading vs. a low of 108.25 on Thursday. Most regional analysts agree that as a net exporter to the U.S., Japan is more vulnerable than other countries in the region to rising commodity prices and talk of stateside weakness. In Hong Kong, the Hang Seng was lifted by blue-chip oil and gold stocks, and telecoms rebounded from recent weakness. PetroChina ( PTR) surged 7.4%, to HK$14.18, while gold miner Zhaojin Mining ( ZHAOF) soared 8.5%, to HK$37.55, and rival Zijin Mining ( ZIJMF) leapt 7.2%, to HK$13.44. Light sweet crude rebounded 11 cents, to $99.18 in Asian trading, after it fell briefly ahead of the market open on profit taking from the overnight record high of $100.09. Among telecoms, China Mobile ( CHL) rose 2.3%, to HK$135.70, China Telecom ( CHA) gained 0.8%, to HK$6.18, while China Unicom ( CHU) bounced 0.6%, to HK$16.50, and China Netcom ( CN) rebounded 4.1%, to HK$23.90, after falling sharply on Thursday. "People are neither bullish or bearish; they are just trying to hunt for value and new concepts which perform in this environment," says Alex Wong, a director of Ample Financial Group in Hong Kong. "Gold may continue this bull run to $1,000. When gold futures start trading next week in Shanghai that will substantially reduce Chinese people's transaction costs in gold trading," adds Wong.
In mainland China, commodity stocks continued to rise for the third straight session. Aluminum Corp of China ( ACH) rose 2.8%, to HK$40.32, while PetroChina "A" shares jumped 0.7%, to HK$31.31. In other Asian news, Thailand is still awaiting the results of an official review into its December election, which was held after a one-year military coup. Despite an election for the People's Power Party, an offshoot of former Prime Minister Thaksin Shinawatre's Thai Rak Thai Party, some officials are claiming election fraud by the PPP. Most Thai political analysts however expect no finding of wrongdoing. But the instability prompted 2.3 billion baht, or $77.2 billion of selling in Thai shares by foreign institutions on Thursday. In India, Tata Motors ( TTM) said it is now in talks with Ford ( FORD) to buy the U.S. carmaker's Jaguar and Land Rover brands.