Japan, Australia break the selloff


Banks raced back on Thursday, after players such as Mizuho surrendered 15 percent in this week's selling

HONG KONG, China (CNN) -- Japan's battered stock market licked its wounds on Thursday, as the selling stopped there and in Australia.

But most Asian markets continued their way down, with Taiwan dropping more than 1.5 percent and Hong Kong falling almost 1 percent.

The rest of the region was narrowly in the red, bar gains in smaller markets like the Philippines and a 1.0 percent run in Jakarta.

South Korea closed slightly down, as did New Zealand. Singapore is trading down almost half a percent heading into the close.

Banks snap back in Tokyo

In Tokyo, the market recovered from two straight days of 19-year lows as bottom feeders snapped up cheap stocks.

The Topix bounced 1.99 percent to 904.05, as banks snapped back. The Nikkei extended morning gains to close up a similar 1.62 percent to 9,222.12.

After a savaging over the past two days, the Big Four banks enjoyed a heady day's gains. Mizuho Holdings, the largest bank in the world by assets, gained 6.57 percent to 227,000 yen.


Figures showed capital spending fell in the second quarter in Japan, and business confidence is on the decline

Its fellow giants matched that, with Mitsubishi Tokyo Financial Group up 7.74 percent to 766,000 yen, UFJ Holdings up 6.99 percent to 245,000 yen, and Sumitomo Mitsui up 6.42 percent to 547 yen.

The Financial System Council, a government advisory panel, approved a report calling for unlimited government protection of interest-free bank accounts.

Hakuo Yanagisawa, the minister in charge of financial affairs, also said he will consider a grace period for banks to comply with the end of government guarantees of deposits.

Technical bounce

Most of Japan's rebound was technical, produced by the earlier selling and a reaction to overnight gains from Wall Street.

Toshiba Corp., the world's second-largest chipmaker, climbed 4.21 percent to 396 yen. Mitsubishi Electric gained 3.94 percent to 396 yen.

One of Wednesday's few gainers, Japan Tobacco, lost 0.38 percent to 792,000 yen. It had risen during the selloff as a defensive play.

The yen was aimless against the dollar on Thursday and stands at 117.51 in early London trade.

Big caps up in Sydney

Australia's S&P/ASX 200 index also enjoyed a rally, rising 0.66 percent to 3,113.5. News Corp. lifted 0.65 percent to A$9.34.

Telecom stock Telstra climbed 1.6 percent to A$4.97, and banks locked in a solid day's gains. National Australia Bank ended ahead 1.2 percent at A$35.17.

Rio Tinto rose 1.8 percent to A$31.35, with BHP Billiton ending flat at A$8.90. Miner MIM rebounded 4.6 percent.

The trading was stable, Wall Street giving world markets a firm underpinning after arresting its slide on Wednesday. The Dow Jones industrial average put on 1.4 percent and Nasdaq recovered 2.25 percent. (Full story)

But most Asian markets are still reeling from this week's selling. U.S. and Australian gains and a rebound in Japan were not enough to lift New Zealand out of the red.

The Top 40 lost 0.3 percent to end at 2,045.36. Wood products company Carter Holt Harvey was down 2.8 percent to NZ$1.74, giving back its gains late last week.

Telecom New Zealand climbed 0.60 percent to NZ$5.05.

Samsung brings Korea down

In South Korea, the Kospi ended down 0.29 percent at 720.98, with Samsung Electronics getting no Nasdaq boost.

The chipmaker and Seoul's largest listing lost 0.9 percent to 321,000 won ahead of a briefing to investors by Intel.

There was little support from other blue chips, with SK Telecom and KT Corp. both lower.

Hyundai Motor Co. fell 1.79 percent to 32,850 won despite saying it is raising its export prices to counteract the impact of a stronger won. (Full story)

Taiwan chips sell despite Nasdaq

Taiwan's Taiex fell 1.65 percent to 4,459.37, the largest Asian decline on the day. The performance was all the more surprising given Nasdaq's gains of the day before.

Taiwan is now at its lowest levels since last November, the mood turning gloomy about the island's mix of chip and computer makers.

TSMC, the world's biggest contract chipmaker, fell 0.84 percent to T$47.50.

Chip set maker Via Technologies gave up 2.26 percent to T$47.60. Nanya Technologies fell the daily 7 percent limit to T$30.90 despite strong sales for August.

It also said demand may be weaker for the fourth quarter.

Hong Kong property faces shorts

In Hong Kong, the Hang Seng fell 0.96 percent to 9,276.03. It had bucked the selloff on Wednesday.

Investors spent the day on the line for telecom earnings -- and they liked what they heard. China Unicom, the mainland's second largest cell phone service, rose 0.93 percent to HK$5.50.

It said profits rose slightly for the first half of the year, after analysts predicted a fall. (Full story)

PCCW rose 0.78 percent to HK$1.30 ahead of its earnings. It recently fell to record lows since its purchase of Hong Kong's main fixed-line telecom two years ago.

Short selling hit Cheung Kong Holdings, a notable gainer the day before. It fell 1.78 percent to HK$55.25.

Other property stocks were hit, too, and bank HSBC dropped 0.55 percent tot HK$85.50.

Singapore's Straits Times index is down 0.45 percent at 1,450.86 heading into the close.

SingTel, Singapore Airlines and Singapore Press Holdings -- three of the Lion City's largest listings -- all are lower.