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SCMP Reporter

ASIAN stock markets closed mostly higher yesterday, with share prices surging in Tokyo for the second straight day.

Prices rose on short-covering of futures positions and buy-backs of shares that had been hit hard in recent weeks such as banks and brokerage houses.

In Taipei, prices dropped as overweighted financial issues continued to drag down the main index.

Manila prices rose on aggressive buying of recently slumping issues.

Korean prices dropped on late selling after a report that some companies inflated their net profits for last year.

Singapore prices rose as foreign institutions and domestic buyers showed a willingness to put large amounts into highly rated blue chips.

In Kuala Lumpur, prices rose following gains on Wall Street and regional markets.

AUSTRALIA SHARES ended lower on light volume, with prices depressed by investor nervousness ahead of tomorrow's release of balance of payments data.

  The All Ordinaries Index ended 9.1 points lower at 1,899.7, after reaching an intra-day high of 1,914.9.

 BANGKOK STOCKS rallied in the afternoon on foreign buying, notably of telecommunications issues, brokers said.

  The SET Index closed up 11.85 points at 1,211.57 on moderate turnover of 4.12 billion baht.

  'Foreign investors selectively bought stocks on views that the index has formed a strong support base at around 1,200 points,' said an analyst. Technicals showed the index would move sideways in the short term and indicate good signs in the medium term, she said. The index was likely to edge up today to test resistance at 1,220, she added.

 BOMBAY STOCKS rose after a three-person committee appointed by the market regulator backed trading on margins and the rollover of trades, analysts said.

  A year ago, the Securities and Exchange Board of India banned margin trading on the grounds that it led to excessive speculation.

  Trading activity fell to 10 per cent of the previous level.

  'My reaction is very positive,' said Arjun Kapur, head of the brokerage Arjun Kapur & Co.

  The BSE Index rose 17.82 points to a provisional 3,317.01.

 JAKARTA PRICES closed mixed in thin trading on modest buying, with market sentiment remaining strong, brokers said.

  The official index rose 2.49 points to close at 426.08.

  Gainers led losers by 40 to 21, with 24 issues unchanged.

 KUALA LUMPUR PRICES closed higher on cautious buying ahead of today's release of Bank Negara's annual report for last year, brokers said.

  They said although concern about Malaysia's current account deficit lingered, the market had already factored in a wider-than-forecast deficit.

  Bank Negara has predicted a deficit of M$12 billion for last year.

  'Anything near M$12 billion should be acceptable,' said a brokerage research manager.

  The KLSE Index ended up 12.01 points at 964.75.

  Brokers said trading was dominated by retail investors, although institutions were seen nibbling on selected blue chips.

 MANILA PRICES closed higher as foreign buyers started to hunt for bargains among blue chips, brokers said.

  'Some foreign buying started coming in at mid-session and brought the market up,' said Jerome Tan of Guoco Securities.

  Brokers said the technical rebound still was not convincing because the value of shares traded was still thin at an estimated 600 million pesos.

  The Composite Index finished up 39.57 points at a provisional 2,287.95.

  'Turnover is still low but at least the market has touched off. I think this shows that some hands are trying to get into the market slowly because prices are very attractive,' said Rolly Pineda of Tower Securities.

 SEOUL PROFIT-TAKING in blue chips by institutional investors erased small early gains and sent the market to a lower close.

  The Composite Index shed 5.94 points to end at 947.90, off the day's high of 963.32.

  Losers led gainers by 472 to 264.

  'Institutions tried to materialise profits ahead of their book closures,' said Park Key-pyong of Hanyang Securities.

  'Investors, individuals in particular, are concerned by slipping customer deposits,' said Hwang Chang-joon of L G Securities.

 SINGAPORE PRICES closed higher, lifted by US programme buying and gains chalked up by the region's markets, brokers said.

  'Under volatile US dollar conditions, funds would rather stick to their home markets for the time being until the currency situation stabilises,' said James See of Kim Eng Securities.

  The 30-share Straits Times Industrials Index closed up 13.67 points at 2,104.24. Total volume was 132.02 million units.

  One stockbroker said clients were picking up quality blue chips but institutional funds were still rather hesitant.

 TAIPEI PRICES reversed early gains to close lower on late profit-taking in textiles and plastics issues, brokers said.

  The Weighted Index, which opened at a high of 6,506.75, closed down 5.52 points at 6,464.76. Turnover was NT$52 billion, compared to NT$45.9 billion on Monday.

  The market was basking in relative optimism in early trade because Parliament had yet to reach conclusions on a proposal to reintroduce the capital gains tax on stocks.

  But recent rises in industrial issues led to some late profit-taking in plastics and textiles, leading to a downward-moving index.

 TOKYO STOCKS posted spectacular gains for the second straight day, driven up by media reports that the Bank of Tokyo and Mitsubishi Bank had agreed in principle to merge, brokers said.

  A senior Bank of Japan official confirmed the plan but spokesmen for the two banks denied the reports.

  Buying of banking shares and other financial institutions boosted overall prices, brokers said.

  The 225-share Nikkei average closed up 585.48 points, or 3.64 per cent, at 16,681.73.

  Trade was relatively quiet until the merger reports hit the market in the late afternoon, although index-linked buying and short-covering kept prices buoyant.

  'A large scale merger like this must be positive as it will help them write off their bad loans more quickly. Expectations that others may follow suit, and that financial institutions will be able to improve their financial health, triggered active buying in banking and brokerage shares,' said a broker at Okasan Securities.

  'The merger reports spurred active buying when the market was on a short term recovery trend,' said another broker.

  'If the merger materialises, the market will welcome the move as both banks have a smaller amount of bad loans compared with other major banks,' said a Nikko Securities broker.

  Brokers said buying was also encouraged by Finance Minister Masayoshi Takemura's comment late on Monday that his ministry would 'seek flexible use of monetary policy'.

 WELLINGTON SHARE prices ended higher on heavy turnover, aided by a strong close on Wall Street and a rally in domestic bonds.

  The NZSE-40 Capital Index ended at its highest point for the day at 1,991.46, up 33.87 points. Turnover was heavy.Agencies 



Nikkei surges for second straight day