Banks lift Tokyo, but Asia struggles


Tokyo shares staged a surprising rebound after investors picked up battered tech and bank issues

TOKYO, Japan -- Investors breathed a sigh of relief in Japan after stocks rose from 18-year lows, but other Asian markets took their cue from four days of losses on Wall Street.

Tokyo stocks snapped a four-day losing streak on Thursday, lifted by a surge in big banks on speculation the government will soon step in to aid the shaky financial system.

The benchmark Nikkei 225 average ended up 1.72 percent or 162.42 points at 9,583.27, while the broader capital-weighted Topix index jumped 2.03 percent or 18.73 points to 941.24.

Other major markets in Asia reacted to worries about corporate earnings in the U.S., with Seoul, Singapore, Australia and Hong Kong stocks all ending lower.

Taiwan's stock market was closed for New Year holidays, and will reopen on February 18.

Tokyo surge

Japan's battered banking shares saw the most gains on Thursday, with big rises across the board on what traders say is short covering.

Many investors are now expecting ailing Japanese banks, burdened by nonperforming loans, to be rescued by the government.

There are hopes U.S. President George W. Bush will also pressure Japan to dispose of banks' massive bad loans more quickly when he visits in February, traders told Reuters news agency.

Mizuho, the world's largest bank by assets, fired up 19.5 percent to 239,000 yen, helping the sector subindex surge 8.20 percent after ending Wednesday at an uncharted low.

Mitsubishi Tokyo Financial Group added 100,00 yen or 14.5 percent to 789,000 yen. UFJ was up 12.8 percent to 273,000 yen.

Among tech shares, NTT Docomo soared 5.3 percent to 1.39 million yen on news its European partner KPN Mobile is expected to roll out DoCoMo's successful I-mode service in Germany next month. That would be the first time the service has been offered outside Japan.

Another mover was Snow Brand Milk, its shares soaring 5.77 percent to 110 yen, on reports that the scandal-hit dairy products maker will receive a capital injection.

Seoul struggles

In a widely expected decision, South Korea's central bank left interest rates unchanged at 4.0 percent Thursday.

This comes at a time when healthy economic data, upbeat earnings and possibly an upgrade to its sovereign ratings all point to better times ahead.

But Seoul's market traded lower, with the Kospi skidding 1.87 percent to 727.71.

Hynix Semiconductor Inc., the world's third-largest memory chipmaker, dropped 5.8 percent to 2,340 won.

Hynix was hurt by reports that U.S. maker Micron Technology has demanded creditors contribute cash and help smooth the way in its bid for Hynix's memory operations.

Hong Kong downbeat

Hong Kong's benchmark Hang Seng index tumbled 1.72 percent to close at 10,409.68.

Investors are concerned that Chinese PC maker Legend Holdings will not be able to withstand slowing demand for computers. Legend's shares have closed down more than 8.75 percent at HK$3.12.

The territory's top fixed line phone operator, Pacific Century Cyberworks was also among the blue chip losers. PCCW fell 3.17 percent to HK$1.83.

Singapore and Australia slip

Singapore tech shares led the market lower, as investors braced for a slide on Wall Street after U.S. tech bellwether Cisco Systems's downbeat outlook.

The bellwether Straits Time Index was down 1.67 percent to 1,719.46 near the close.

Singapore Airlines was a rare gainer, up 0.8 percent to S$12.50

In Australia, stocks slipped on profit-taking. Stronger telecom and transport blue chips failed to offset losses in gold stocks and other resources.

The benchmark S&P/ASX 200 index ended 10.0 points, or 0.3 percent weaker at 3,414.5 after trading flat for most of the session.

The gold sector retreated from five-year highs seen earlier in the week despite the price of gold skipping back above US$300 an ounce in Asia Thursday.

Leader Normandy fell 2.1 percent to A$2.32 on heavy turnover.

Leading telco Telstra was up 0.75 percent at A$5.40. Media heavyweight News Corp was down 1.57 percent to A$12.55.