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Nikkei hurtles past 18,000
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July 5, 1999: 5:18 a.m. ET
Japan hits 21-month closing high on Wall St. records, strong 'tankan' numbers; HK soars
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LONDON (CNNfn) - A steady stream of cash poured into Asia's largest markets Monday, driving triple-digit point gains in Hong Kong and Tokyo following record closes on Wall Street. Japanese stocks hurtled over the 18,000 barrier for the first time in 21 months, while Hong Kong climbed more than 2 percent on a wave of liquidity.
The Nikkei 225 average ended up 255.14 points, or 1.42 percent, at 18,187.61, its highest closing level since September 1997 after the Bank of Japan's quarterly "tankan" business survey indicated resurgent business confidence in Asia's biggest economy.
Pacific Rim markets drew strong momentum from the survey, which suggested that economic fundamentals are improving at a modest enough pace to prevent a tightening of monetary policy in the short term. The new numbers follow the recent release of better-than expected gross domestic product figures.
The tankan survey showed that while Japanese companies continue to exercise caution, pessimism is on the wane.
"I think that looking forward we'll start to see strong economic growth," Neil MacKinnon, an independent economist based in London, told CNN. "I'm fairly optimistic that the economy will start to pull through in the next 12 to 18 months."
A report in the Japanese press Monday said that overseas shareholders held 14.1 percent of the equities listed on Japanese exchanges at the end of March 1999, more than the percentage in the hands of Japanese banks.
In Hong Kong, the Hang Seng ended sharply higher, supported by gains in index heavyweight HSBC Holdings and "red chip" powerhouse, China Telecom.
The Hang Seng closed up 322.16 points, at 14,506.74, a gain of 2.27 percent, buoyed by the triple-record advances on Wall Street Friday as U.S. investors continued to take heart in indications that the Fed has stepped back from the brink of another short-term rate hike.
Hong Kong trading was heavy, with volume at HK$14.55 billion, up from HK$14.36 Friday. Advancers led decliners 501 to 157. The Hang Seng has surged 974.60 points, or 7.2 percent, in two days.
Most buying in Hong Kong Monday was centered on "red-chip" stocks in China-affiliated companies, where one of the big equity stories of the day was China Telecom, a major constituent of the Hang Seng, that has seen a rapid jump in subscribers to its cellular phone business.
CT jumped nearly 7 percent amid speculation the company may be poised for acquisitions in the Chinese networking sector. The company hasn't made any major purchases in almost a year. Local traders are seen bidding up the stock in the belief a purchase may be ripe - even though China Telecom itself has remained mute on the issue.
Banking and property stocks in Hong Kong were mixed, however. Bank of East Asia dipped HK$0.10 to HK$20.400, while Hang Seng Bank lost HK$1.00, to HK$89.750. HSBC Holdings, the gauge's most heavily-weighted stock, gained 2.5 percent to HK$101.500 after undergoing a one-for-three stock split.
Shares of New World Development closed up 9.3 percent after the firm announced plans to acquire the remaining 42.95 percent of shares in a housing unit, New World Homeowner China, paving the way for a listing of New World China Ltd.
Three key U.S. financial gauges - the Dow Jones industrial average, the Nasdaq Composite and the S&P 500 index - all marched to record highs. The Dow added 72.82 points, climbing to a record 11,139.24, well above its previous closing high of 11,107.
Singapore shares fell 0.5 percent to 2,222.45.
In Tokyo, where advancers outstripped decliners 712 to 503, an Internet investor, Softbank Corp. leapt 7.55 percent to a lifetime high of 28,500 yen amid rising interest in its business strategy. Softbank has recently penned Internet-related deals with Rupert Murdoch's News Corp. and with Vivendi (PEX) of France.
Australian shares ended at their highest level in 10 weeks, as Wall Street's strength fed a rallying mood. The All Ordinaries index finished up 1.62 percent at 3,078.1. Oil and gas group Woodside Petroleum was initially the leading performer on the benchmark index, leaping to a 20-month high of A$11.40 before settling back slightly. Woodside shares ended 51 cents higher at $A11.25, a gain of around 4.8 percent.
In Kuala Lumpur, blue chip stocks came off early highs to trade up 1.44 percent at 845.62 after some early euphoria dissipated.
Shares on Taiwan's weighted index closed up 0.35 percent, at 8,593.35, propelled by an inflow of overseas cash and expectations of a hike in prices for raw materials. Separately, a Chinese newspaper reported that U.K. stock index compiler FTSE International is mulling whether to include the Taipei blue-chip exchange in its global weightings. A decision is expected in September.
Philippine stocks got a boost from stronger-than-expected June inflation data and other favorable economic data, shooting to a 23-month high at 2,621.67, a gain of 1.67 percent. A cut in the amount of reserves required by local banks also gave Philippine stocks a lift.
In the losing column, Jakarta shares slumped 0.8 percent amid worries about a postponement in a meeting of the country's leading lawmakers. Thai equities were up 0.25 percent.
South Korea's Kospi index soared 3.15 percent to 933.42, driven higher by the surging sentiment in overseas markets.
-- from staff and wire reports
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