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Tokyo closes in red, banks gain
staff and wires
TOKYO, Japan -- Tokyo stocks reversed early gains to close in the red Thursday as disappointment with a banking reform plan gripped the market. The Nikkei 225 average ended down 1.33 percent at 8,640.48, after jumping almost 1 percent at the open. The broader capital weighted Topix finished 0.92 percent lower at 862.24. But the big Japanese banks moved against the trend, reflecting the view that a watered-down reform plan meant they had escaped harsh treatment over their $400 billion in bad loans. Mizuho Holdings jumped 6.3 percent. Other Asian markets were generally higher, with good gains in Australia and Taiwan, but a fall in Hong Kong. Singapore rallied at the close to end just in the black. South Korea's Kospi gained slightly, as did the New Zealand Top 40. In Taiwan, the U.S.-oriented Taiex put on 1.8 percent after a tech rally helped lift Wall Street. Nasdaq closed 2.0 percent higher and the Dow Jones industrial average put on 0.7 percent. (Full story) Bank plan fails to impressIn Tokyo, analysts gave a lukewarm response Thursday to the Koizumi government's long-awaited plan to clean up massive bad debts in the banking system. The plan's architect, Financial Services and Economics Minister Heizo Takenaka, was forced to make compromises in the face of staunch political opposition. The plan, released late Wednesday, steered away from putting a time frame on a key proposal that could hurt many banks' capital. (Full story) For investors, that put the banks on the "buy" side. Along with Mizuho's spectacular gain to 187,000 yen, UFJ Holdings put on 5.7 percent to 185,000 yen, Sumitomo Mitsui Bank Corp. rose 1.8 percent to 507 yen and fifth-ranked Resona added 4.5 percent to 70 yen. Even Mitsubishi Tokyo Financial Group, regarded as the strongest and most stable of the Big Four banks, showed a 0.6 percent gain by the end of the day. Toyota, Mazda make gains
In the auto sector, good earnings from Toyota Motor Corp. kept it in the black. It finished 0.85 percent up at 2,980 yen after going as high as 3,030 yen. Japan's leading automaker had the day before reported its best operating profit for any half year. (Full story) Mazda also rose, up 3.01 percent to 274 yen after almost trebling its profit forecast on Thursday. (Full story) Most Japanese techs finished weaker, with Sony off 1.86 percent, Hitachi down 2.44 percent and Fujitsu down 3.64 percent to 397 yen. That adds to Fujitsu's 7.0 percent dive in the previous session and took it to a new multi-decade low. The company said on Tuesday it would stay in the red this business year as an IT slump spurred further costly job cuts. But computer and chipmaker Toshiba managed a gain of 1.3 percent to 307 yen. Seoul chipmakers higherIn Seoul, the Kospi squeezed out a rise of 0.14 percent, mainly on the strength of a 2 percent lift for market heavyweight Samsung Electronics. Its volatile rival Hynix also moved upward, ending ahead 3.26 percent to 475 won Fixed-line telecom KT Corp. put on 1.0 percent to 50,300 won. But Hyundai Motor, the country's biggest carmaker, eased 1 percent. In Taiwan, the Taiex rose 1.79 percent to 4,579.14, with chip foundry TSMC up 2.2 percent to T$46.50. Smaller rival UMC also climbed, up 2.86 percent to T$25.20, tracking gains in U.S. techs. Screenmaker Au Optronics ended up the daily 7 percent limit to T$21.90, though turnover was light in Taipei. Australia up on earningsAustralia's S&P/ASX200 finished with a robust gain of 1.22 percent at 3,042.9 after good earnings results from Westpac Bank and a solid showing from BHP Billiton. Resources giant BHP Billiton jumped 3.19 percent to A$9.69 after delivering solid first-quarter earnings that matched expectations. (Full story) Westpac, the smallest of Australia's big four lenders, also did well, putting on 3.9 percent to A$14.20. It reported a record full year profit of almost $1.2 billion Thursday, but warned of a volatile global outlook. (Full story) Other big banks, save for ANZ, were also higher. Grocer Woolworths rose 2 percent, while rival retailer Coles Myer, the center of a long-running boardroom dispute, added 0.8 percent to A$6.39. (Full story) Hong Kong ends downIn Hong Kong, the Hang Seng finished down 1.25 percent at 9,441.25. Blue-chip conglomerate Hutchison Whampoa gave up early gains to end down 1.2 percent, while Cheung Kong fell 0.96 percent to HK$51.75, as big caps and property stocks sank ahead of the half-year budget deficit. Those figures are due after the close of the market. Mobile giant China Mobile also turned into the red, closing down 3.00 percent at HK$19.15. The big news in the market involved a deal that's not being done -- fixed-line giant China Telecom deferred the expected pricing of its stock offering to next week because of lackluster demand. (Full story) Investors have sold out of China Mobile and China Unicom, down 1.02 percent to HK$4.85, to make room for Telecom. There was no fright for Standard Chartered, making its Hong Kong debut on Halloween. It finished at HK$87.00, up 3.57 percent from its HK$84.00 offer price but in line with its close the day before in London. Sinopec ended up 2.54 percent to HK$1.21 after meeting expectations in its earnings report. (Full story) Singapore's Straits Times index ended up 0.30 percent at 1,463.37 after its banks rallied. DBS Group, the largest bank in Southeast Asia, closed up 0.81 percent at S$12.40, after trading down in morning, while OCBC and UOB came back from losses to end flat. Reuters contributed to this report.
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