Asian Markets Bounce, Eyes on Lehman Sale
Asian markets rose Friday, with shares outside of Japan rebounding from a 23-month low on reports Lehman Brothers had put itself up for sale, suggesting a smaller risk of a Wall Street meltdown spreading to the region.
Oil prices edged up above $101 a barrel, supported by fears Hurricane Ike could disrupt U.S. production. Crude remained on course to fall below the psychologically important $100 level, especially with the euro falling to a one-year low against the U.S. dollar this week.
Gains in regional bank stocks such as Japan's Mitsubishi UFJ Financial, South Korea's Kookmin Bank and Australia's Macquarie Group, outpaced the broad indexes on optimism that Lehman , whose shares plunged more than 40 percent Thursday, would find a suitor by this weekend.
Many investors were in wait-and-see mode ahead of any developments with Lehman, though in the thick of the financial crisis, any progress has been followed with signs of trouble at other institutions. Indeed, Washington Mutual , the largest U.S. savings and loan, was downgraded to below investment-grade status by Moody's Investors Service on Friday, citing constraints to tapping capital markets.
Japan's Nikkei 225 Average closed up 0.9 percent, with financial shares gaining sharply. The market went through a roller-coaster ride ahead of a three-day weekend, dipping into negative territory briefly as investors hurried to lock in profits amid uncertainty over the U.S. financial sector and the global economic outlook.
Seoul shares finished 2.4 percent higher after their U.S. peers rallied on that Lehman Brothers report, while drops in oil lent support to airlines and exporters. Shares sensitive to energy prices rose with Korean Air Line gaining over 5 percent. Steelmakers also advanced after their latest losses.
Australian shares ended up 1.9 percent, reversing a three-day losing streak, with the Lehman reports sparking confidence that major losses on mortgage-backed loans could again be managed. Miners and financials gained, with BHP Billiton up more than 4 percent. Telecommunications leader Telstra also propelled the market.
Hong Kong's Hang Seng Index slipped 0.2 percent, despite a rebound in local property counters and a rally in power producers on rumors of a retail electricity price hike in China. Sun Hung Kai Properties, Asia's third largest property developer by value, rose 4.6 percent in a relief rally after its 3.14 percent fall in second-half earnings was less severe than analysts had expected.
Singapore's Straits Times Index was up 1.2 percent with financials taking the lead. Shares of planter Golden Agri-Resources rose as much as 6.3 percent after Singapore Exchange announced that it will be adding the stock to its benchmark Straits Times Index on Sept 22.
China's Shanghai Composite Index closed flat as most blue chips stayed sluggish but power generators climbed on speculation that retail electricity prices might soon be raised. The official China Securities Journal quoted officials at the state electricity regulator as saying China was likely to raise retail power prices in coming months as inflationary pressure eased. This boosted shares such as Datang Power.