Asia shakes rate hikes with solid black


Tokyo exporters breathed a little easier as the yen backed off its run of strength to 128 on Wednesday

By Alex Frew McMillan and wire reports

HONG KONG, China (CNN) -- Asian markets posted gains almost across the board on Wednesday, again showing strong direction after an indifferent Wall Street performance overnight.

Tokyo shook off prospects of a first annual loss -- which didn't materialize -- for mobile phone leader NTT DoCoMo.

DoCoMo and carmaker Toyota have traded back and forth for first spot in terms of market capitalization in Japan.

Asian stocks have rushed back in 2002. But on Tuesday, the Dow Jones industrial average wavered to a 0.29 percent gain while both the S&P 500 and Nasdaq suffered 0.3 percent losses.

For bulls, Asia has been the place to be in 2002. And it was again on Wednesday, Japan's Nikkei index climbing 1.8 percent to 11,520.75.

The broader Topix index of all Section 1 shares climbed 0.71 percent to 1,081.76.

South Korea was up more than 2 percent. Australia rose again. Hong Kong closed lower but saw banking giant HSBC fire ahead.

Interest rates rising

Interest rates are on the rise in the Asia Pacific region, with first South Korea and then Australia raising rates (full story).

In the United States, the U.S. Federal Reserve Board left rates alone on Tuesday, with the extent of a U.S. recovery as yet uncertain. But productivity posted a strong showing, in a separate release of data.


The banner is about the World Cup, but Seoul's market has been open to overseas investors this year, leading to rate rise

In Tokyo, NTT DoCoMo said after trade ended that it scraped into the black on profit of 862 million yen, down 99.7 percent (full story).

The company had forecast a loss. It is the largest cell-phone service in Japan and one of the world's technology leaders in that industry.

The yen gave major exporters a breather, backing off its strength after the return of trade in Tokyo on Tuesday.

As trade switches to Europe on Wednesday, the currency is off its 126 level at 128.41. A strong yen -- which Japan credits to U.S. dollar weakness -- hurts profits when they are sent back to Japan.

Sony Corp. gained 0.44 percent to 6,850 yen. It gets around one-third of its sales from the United States.

Cisco bounce ahead?

Tech stocks in the United States look set to bounce on Wednesday, after strong after-hours trading based on better-than-expected profits from Cisco (Tuesday roundup).

But chip gains were not across the board in Japan, with NEC falling 0.22 percent to 924 yen.

In Seoul, the Kospi forged ahead 2.2 percent, to 844.67, as Asia's strongest performing developed stock market of 2002 found its legs again.

While much of the world wades through recession, the central Bank of Korea and business analysts are fretting South Korea will run ahead of itself.

The central bank raised rates on Tuesday. But the Seoul market took little notice, Samsung Electronics climbing 2.7 percent to 361,500 won.

The chip stock has been mooted as a strong competitor for Sony, which recently snatched first spot in world electronics sales.

Mobile-phone service SK Telecom rose 2.6 percent to 253,500 won.

Australia rises off lows

In Australia, the S&P/ASX 200 index lifted 0.45 percent to 3,339.9. Sydney stocks had sunk to their low for the year.

The Reserve Bank of Australia raised rates, but the market took that as encouragement rather than a restraint.

Retailer Coles Myer climbed, with News Corp. up 2.6 percent to A$11.98. Mining stocks such as BHP Billiton were also up.

But banks took the interest-rate rise to heart, with National Australia Bank falling 0.6 percent to A$35.04.

In Wellington, New Zealand's Top 40 index was one of the only fallers in Asia, down 0.09 percent to 2,050.22.

The loss was offset by a 0.4 percent rise in Telecom New Zealand, the market heavyweight.

Property money off the table

Hong Kong, Asia's worst performing market of 2001, fell with the Hang Seng down 0.23 percent to 11,7689.31. It has typically run contrary to the pack of Asian markets so far this year.

The loss would have been larger were it not for bank stock HSBC, up 1.05 percent to HK$96.00.

Still, investors have shown more interest in the Hang Seng this year, as they have the rest of Asia, which some analysts attribute to fund managers' fear of a rally.

Holders of property stocks took the opportunity of recent rises to take some money off the table on Wednesday.

Bank stock ICBC Asia, a company in the hands of the Industrial Commercial Bank of China, lost 4.12 percent to HK$8.15 after saying it would sell stock at a discount to its Tuesday close of HK$8.50.

China's markets are back in action after the week break for the Labor Day national holiday celebrations.

Trading was thin. But what investors there were in a mood to sell.

Shanghai's B share index dropped 0.74 percent, with the smaller Shenzhen market off 0.86 percent.

In Singapore, the Straits Times index is up 0.39 percent at 1,727.62 in the last hour of trade. Tech stocks there took heart from the Cisco earnings.

India's market is higher in afternoon trade, with the Bombay Stock Exchange index up 0.42 percent around 1:30 p.m. local time.