CHINA / National |
China, Korea stocks hit records(Reuters)Updated: 2007-05-28 23:05 SINGAPORE - Asian stocks rose on Monday, with China's market surging to an all-time high and South Korea also hitting a record, as a rally in metals prices lifted miners and a stronger dollar boosted shares in Japanese exporters. The US currency hovered near a three-month high against the yen and a six-week peak to the euro as traders bet weak US housing data late last week was not enough to warrant a cut in US interest rates later in the year. Crude oil prices eased about a third of a percent after a Nigerian oil union strike was suspended at the weekend, but remained above $70 a barrel on worries about gasoline supplies ahead of the US summer holiday season. European shares were expected to open firmer, but activity was seen limited with several markets, including Britain and Germany, and the United States, closed for public holidays. Tokyo's Nikkei rose 0.6 percent, while MSCI's index of shares elsewhere in the Asia Pacific region was up 0.4 percent at 0640 GMT. "Last week's trend of the weaker yen is continuing, so that is a plus for exporters," said Katsuhiko Kodama, senior strategist at Toyo Securities. A weaker yen boosts companies such as electronics components maker Kyocera (6971.T), which rose 1.1 percent, and Honda Motor Co. Ltd. (7267.T), which firmed 0.7 percent, as it inflates the value of overseas earnings. Sumitomo Metal Mining Co. Ltd. (5713.T) rose 3.2 percent on higher metals prices. The dollar bought around 121.62 yen, within sight of a four-year high of 122.20 touched in January. The euro was around $1.3455. Data on Friday showed the pace of existing US home sales in April was the weakest in nearly four years, but traders believed that alone may not prompt the Federal Reserve to cut rates from 5.25 percent, given other, stronger data in recent weeks. "In the end, Friday's data was not enough to significantly raise the chance of a rate cut," said Nobuo Ibaraki, forex manager at Nomura Trust and Banking. "We should see the dollar rise slowly this week." Expectations that Japan's interest rates would be raised from 0.5 percent later in the year -- underlined by a weekend interview with Bank of Japan governor Toshihiko Fukui in a Japanese newspaper -- failed to support the yen. "Fukui's interview contained nothing new, but it confirmed market views that the BOJ is monitoring a lot of things in preparation for a rate hike," said Naomi Hasegawa, senior fixed income strategist at Mitsubishi UFJ Securities. RECORD HIGHS South Korea's KOSPI rose 0.8 percent to a record close, led by a 4.6 percent gain for steel maker POSCO (005490.KS) on a broker upgrade. China's benchmark index rose more than 2 percent to the latest in a string of record highs, as individual investors continued to pour money into the market despite growing concerns in some quarters -- voiced last week by former Fed Chairman Alan Greenspan -- that Chinese stocks are dangerously overvalued. "I think the basic trend of the stock market is still upwards," said Zhou Lin, analyst at Huatai Securities. Markets in Hong Kong and Singapore posted modest gains, while Taiwan shares were little changed. Australia's S&P/ASX 200 was also flat, but mining heavyweights BHP Billiton (BHP.AX) and Rio Tinto (RIO.AX) both rose 1.5 percent after lead hit a new high on the London Metal Exchange on Friday and other base metals gained. Shanghai copper futures rose by their 4 percent daily limit on Monday, following gains on the LME last week and as inventories fell. Spot gold was just below $656 an ounce, up slightly on the day. London Brent crude, currently seen as a better benchmark for world oil prices than US crude, slipped 23 cents to $70.46 a barrel. Nigerian union leaders suspended a strike after two days on Saturday, but energy traders remained nervous about exports from the OPEC member after an increase in violence against oil facilities in the Niger Delta in recent weeks. "Currently there are a number of factors that threaten potential disruptions to oil supplies from Nigeria, the strike is only one of them," said David Moore, commodities strategist at Commonwealth Bank of Australia. "The law-and-order type issues ... are posing a more long-standing risk to oil supplies." In the Japanese Government Bond market, June 10-year futures were unchanged on the day, recovering after falling to a seven-month low earlier. Benchmark 10-year yields inched up half a basis point to 1.725 percent. |
|