More Credit Clarity Pushes Asian Stocks to Higher Close
Asian markets finished higher across the board Tuesday, with Hong Kong, Australia, Singapore and South Korea in record-breaking territory lifted by financial companies after big banks, including Citigroup, set out their losses from subprime crisis, raising hopes that the worst may be over.
Relief that the impact may ease in the near term boosted regional financial shares. Australia's Babcock & Brown, Singapore's DBS Group and Japan's Mitsubishi UFJ Financial Group were all sharply higher.
Tokyo's Nikkei 225 Average added 1.2%, ending above 17,000 for the first time in nearly eight weeks as Sony gained after saying its financial unit had set its IPO price at the top end of its tentative range. Financial shares rallied as investors bet that the worst of the U.S. subprime mortgage-related crisis was over, while exporters such as Canon gained due to a rally on Wall Street the previous session and a softer yen.
South Korea's KOSPI ended 2.6% higher to a record closing as financials rallied on receding worries about credit market turmoil, while resources stocks such as Korea Zinc soared on strong metal prices. The market was also buoyed by a meeting between the leaders of South and North Korea, only the second since the 1950-53 war between the countries ended in armistice rather than a full peace treaty.
Australia's S&P/ASX 200 Index hit a new record, closing 1.5% higher, driven by financial firms such as Macquarie Bank on easing worries about a global credit squeeze, while miners rose on firm metal prices.
Singapore's Straits Times Index struck a record at the close, the fourth straight trading session that saw the index at all-time highs, due to gains in banks and in index heavyweight Singapore Telecommunications. The STI has gained 28% since the start of the year.
Hong Kong blue chips jumped over 3.3% and China plays leapt 5.7% in a broad rally as hopes
were high that the subprime problems had bottomed. The growing inflow of mainland funds into Hong Kong equities also helped the market clear the 28,000 level for the first time, setting a midday turnover record in the process. Chinese markets are closed for holidays and will resume trading October 8. The Hang Seng closed 3.9% higher.