Markets rebounded today after several days of steep declines as investors snapped up shares like Honda and Samsung that have been beaten down in recent weeks.
Major Asian markets rebound
Major Asian stock markets rebounded today after several days of steep declines as investors snapped up shares like Honda and Samsung that have been beaten down in recent weeks. Japan's benchmark Nikkei 225 index jumped 459.02 points, or 6.4 per cent, to 7,621.92 after early falling below 7,000 points to fresh 26-year lows. A weaker yen against the dollar encouraged traders to buy exporters like Toyota, whose overseas earnings are eroded by a strong yen.
The dollar, which had fallen to a 13-year low against the yen on Friday, rose to 95.51 yen from 93.01 yen in late New York trading. Hong Kong's Hang Seng index surged nearly 11 per cent to 12,215 in afternoon trading - a day after plunging more than 12 per cent. South Korea's Kospi also recovered after falling earlier, jumping 5.6 per cent to close at 999.16. "Sentiment turned positive in the afternoon session thanks to sharp gains in the Hong Kong stock market," said Yutaka Miura, senior strategist at Shinko Securities in Tokyo.
"Investors were now buying back after the Nikkei index slipped below the 7,000-level in the morning." Castor Pang, analyst at Sun Hung Kai Financial, said market sentiment in Hong Kong was better today, but said the Hang Seng was mostly reacting to the previous day's big loss. "It's only a technical rebound," he said. Australia's key stock measure closed down 0.4 per cent, though sharply pared earlier losses.
Macquarie Equities analyst Helen Spencer said investors took heart from the rebound in Japanese stocks. "The positive result on the Nikkei has helped to spur a bit more confidence this afternoon on the market," she said. In South Korea, the buying was driven by domestic investors following the biggest rate cut ever by the central bank on Monday, analysts said, even as foreign investors kept selling to get cash to meet redemptions and liquidity needs at home.