Tokyo shares bounce back; Sydney extends decline

[Leth]

Tokyo shares bounce back; Sydney extends decline
Asian markets end mixed after yet another day of volatile trading
By V. Phani Kumar, MarketWatch
Jan. 18, 2008

HONG KONG (MarketWatch) -- Asian markets ended mixed after another day of volatility Friday, as cautious investors weighed lingering worries about the U.S. housing and financial sectors against hopes of an economic rescue package from the Bush administration.
Japanese stocks bounced back from 26-month lows to end higher as investors hunted for bargains in beaten-down blue-chips such as Nintendo Co. and steelmaker JFE Holdings.
Australian shares extended their losses into a 10th straight day with resource stocks mostly lower, but shares of miner Rio Tinto soared on hopes bigger rival BHP Billiton may sweeten its offer to acquire the company.
Australia's S&P/ASX 200 index finished the day 0.8% lower at 5,747.30, even as analysts said the country's economy continued to grow well, unaffected by the U.S. slowdown.
"There is forced selling because of people who had borrowed to go into the market ... There has been some mindless or panic-stricken selling as well, like it is the end of the world," said Stuart Smith, a senior client adviser at Bell Potter Securities in Brisbane.
"When you realize that this happens every 10 years, when the market goes past its previous high, you just have to strap yourself in, hold your nerve and see it play out," Smith added.
Chart of JP:1804610
In Japan, the Nikkei average closed 0.6% higher at 13,861.29, jumping nearly 500 points from the day's low of 13,365.32. The broader Topix index also bounced, ending 0.8% higher at 1,341.50.
Hong Kong's Hang Seng Index was volatile before ending 0.4% higher at 25,201.87. The benchmark index had dropped 3.9% in the early minutes of the day. The Hang Seng China Enterprises Index, also called the H-share index, gained 0.6% at 14,561.32.
Elsewhere, South Korea's Kospi rose 0.7% at 1,734.72, New Zealand's NZX 50 index dropped 1.8% to 3,664.36 and Taiwan's Weighted index rose 1% to 8,184.65.
China's Shanghai Composite finished 0.6% higher at 5,180.51, while India's Sensitive Index, or Sensex, was 0.4% lower at 19,618.09 in the afternoon.
"I won't say investors are bearish, but they have turned very, very cautious. Financial markets in the region should be volatile with a lot of news in the pipeline," including the Federal Reserve's interest rate decision and President George W. Bush's economic rescue plan, said Andrew To, sales director at Tai Fook Securities.
Referring to the U.S. financial sector turmoil that has rocked global markets, ratings agency Standard & Poor's Friday said the sector's ongoing "slump" will continue through 2008 and into 2009, testing bank creditworthiness. Large financial groups have to date announced $90 billion worth of write-downs of collateralized debt obligations, subprime mortgage securities and leveraged loans, it added.
Regional detail
In Tokyo, shares of Nintendo rose 3.4%, steelmaker JFE Holdings Inc.'s shares advanced 3.7% and real estate major Mitsui Fudosan Co. climbed 5.9% after all of them lost heavily earlier in the day.
In Sydney, BHP tumbled 4.7% and Woodside Petroleum lost 2.7% on concerns demand for commodities may weaken. Similar concerns also dragged down shares of steelmaker Posco by 4.6% and Hyundai Steel by 3% in Seoul, and shares of Cnooc by 2.8% and gold miner Zijin Mining by 5.6% in Hong Kong.
One exception was Rio Tinto, whose shares soared 4.6% in Sydney trading, on reports that bigger rival BHP will raise its takeover bid from its previous offer. BHP had earlier offered three of its shares for one Rio share under a share swap approach, which Rio had rejected.
In Hong Kong, shares of Chinese banks gained after Industrial & Commercial Bank of China and China Construction Bank estimated a strong growth in their net profit for 2007. Shares of ICBC surged 5.4% and CCB's stock gained 1.5%, while Bank of China soared 4.7%