Asian Markets Close Mixed, India Sinks Further

A rebound in banks and technology shares helped drive many Asian markets to a higher close Thursday, but speculation over the future of the Indian Prime Minister caused the Bombay Sensex to slump late in the session.

The Sensex closed 3.8 percent lower, having suffered a similar drop at the start of the previous trading day, as investors reacted to a rumor that Manmohan Singh, the Prime Minister of India was due to resign, Reuters reported.

Financial stocks were steadier after their recent drubbing, with Australia's Macquarie Bank and Japan's top lender Mitsubishi UFJ both closing higher. But South Korea's Kookmin Bank finished almost 2 percent lower.

Investors bought high-tech stocks such as Samsung Electronics, chip-tester maker Advantest and chip gear maker Tokyo Electron. But Hynix Semiconductor shed 2.6 percent after the world's No. 2 memory chipmaker posted a 56 percent fall in quarterly profits.

Tokyo's Nikkei 225 average closing back above the 17,000 level on gains in high-tech shares such as Canon and a rebound in bank shares after several sessions of heavy selling. Earnings hopes lifted shares of trading and shipping firms such as Mitsui & Co, while Elpida Memory advanced 3.5 percent after the Nikkei business daily reported that it will shift production of DRAM chips entirely to a process using advanced 300 mm silicon wafers by March 2008, six months ahead of its previous plan.

South Korea's KOSPI rebounded from two sessions of falls led by exporters such as Samsung
Electronics after an oil rally stalled, easing concerns about global consumer demand, while fuel-dependent stocks also gained.

Australian shares finished 1.3 percent higher, recouping almost all the losses posted in the
previous four sessions, as recent laggards such as National Australia Bank and other financial firms rebounded.

Elsewhere, reports that Beijing was studying the idea of allowing share swaps in firms listed in mainland China (A-shares) and in Hong Kong (H-shares), powered the Hang Seng Index to close 0.6 percent higher, while sending the Shanghai market skidding.

Hong Kong stocks rose as investors bid up PetroChina and other China plays. The prospect of such an arbitrage mechanism, if implemented, should narrow the discount of Hong Kong shares to their yuan-denominated counterparts listed in the mainland. But the Shanghai Composite Index closed over 3.5 percent lower on the news.

Singapore's Straits Times Index were also lower by 0.8 percent, after spending most of the morning in positive territory.