GO
Loading...

Asian Markets Swing Into Black, Japan Adds 1%

CNBC.com
Tuesday, 11 Mar 2008 | 6:28 AM ET

Asian markets moved out of negative territory and closed higher Tuesday. Japan and South Korea both ended over 1 percent higher despite initial sharp losses during the morning.

A U.S. dollar crawled towards an eight-year low against the yen came to a halt, but some Asian currencies such as the South Korean won weakened against the dollar as investors shunned riskier assets.

Oil , seen as a safe haven against inflation and a weak dollar, held steady after hitting a record above $108 a barrel on Monday, while gold also remained within sight of a peak hit last week. Japanese government bond futures hit a 2-½ year high.

Japan's Nikkei 225 Average closed up 1 percent after earlier touching a 2-½ year low, boosted by buying of JFE Holdings and other steel firms. A late wave of short-covering helped lift banks such as Mitsubishi UFJ Financial Group, which touched a nearly four-year low at one point, while a halt in the yen's advance against the dollar also provided some support

Seoul stocks recovered early losses to end 1 percent higher, led by automobile shares, which rose on hopes that a weaker won would strengthen price competitiveness of Korean cars in overseas markets. Both Hyundai Motor and Kia Motors gained over 5 percent. However POCSO, the world's fourth-largest steelmaker, fell 4 percent, and Hyundai Steel also fell on concerns that high import prices of raw materials may affect profitability.

Australian shares fell 0.9 percent to a one-and-a-half-year low, with resource firms leading declines on fears that a U.S. recession would spread to other global markets and dent commodity demand. But banks reversed early losses to end firmer as investors bought back banking shares that were looking attractive after recent heavy losses, helping the market come off early lows. Market watchers say that the outlook for equity markets remains grim amid worries that deepening credit problems would see more losses at banks and threaten global economic growth.

Hong Kong stocks moved back into the black, with utilities climbing further as investors sought safe havens. But Oil refiner Sinopec fell further as investors worry the price freeze on refined oil products will not be lifted soon, following China's higher-than-expected inflation data released earlier. Many investors, however, took the view that Beijing would lay off on tightening in light of February's snowstorms that wreaked havoc on the economy. The Hang Seng Index closed 1.3 percent higher.

Singapore's Straits Times Index moved into positive territory, finishing 0.9 percent higher, with financials such as DBS Group rebounding.

China's Shanghai Composite Index closed 0.5 percent higher, despite higher-than-expected inflation data, which fueled concern about a possible tightening of monetary policy. Consumer price inflation hit 8.7 percent in February, the highest in over 11 years and up from 7.1 percent in January. Though much of the jump was due to temporary factors such as the winter's fierce weather, the market had generally been expecting a figure of 8.1 percent.