MW: South Korean, Hong Kong shares on sudden wave of investor optimism
HONG KONG (MarketWatch) -- Asian stocks jumped higher at midday Monday, with investors heartened by signs that governments will roll out more stimulus measures to ward off an economic collapse. Drug makers were among standouts in Tokyo while energy group Santos Ltd. led gains in the commodity sector in Sydney on reports it may be the target of a takeover attempt.
Brokers conceded surprise at the size of the surge, attributing gains to sudden optimism China would take further steps to pump up its own economy after President-elect Barack Obama unveiled during a weekend radio address the biggest government-funded work program seen since the building of the interstate highway system in the 1950s.
"Everybody is expecting the Chinese government will unveil more measures to boost the economy," said Fancis Lun, general manager of Fulbright Securities in Hon Kong. He added that the sudden change in sentiment was somewhat mystifying in light of grim U.S. employment data released Friday.
Property stocks were among standouts in Hong Kong, with shares of mainland-geared China Overseas Land & Investment (HK:688: news, chart, profile) up 12%.
Other big advancers included Ping An Insurance, Co (HK:2318: news, chart, profile) shares of which added 10.1%.
The U.S. dollar was traded at 92.82 yen late Monday morning in Tokyo, down from its Friday close of 93.34 yen in New York.
Shares of Santos (AU:STO: news, chart, profile) jumped as much as 10% following a Monday report in the South China Morning Post saying that China National Petroleum Corp. is considering pairing with an unnamed foreign oil company in making a bid for the Australian oil and gas producer. The report did not identify sources.
Gainers in Tokyo included pharmaceutical groups Eisai Co. (JP:4523: news, chart, profile) and Chugai Pharmaceutical Co. (JP:4519: news, chart, profile) , whose shares rose 5.7% and 3.5%.
Among national indexes, Japan's Nikkei 225 was up 4.7% at 8,291.01 in afternoon trading. Hong Kong's Hang Seng Index rocketed 7.5% to 14,886.66 at midday, while China's Shanghai Composite was up 2.6% at 2,071.83, and Australia's S&P/ASX 200 climbed 4% to 3,633.00.
Markets in Singapore, Malaysia and Indonesia were closed for a public holiday.
South Korea's Kospi index was up 7.1% at 1,100.09 and New Zealand's NZSX-50 was down 0.3%.
Other gainers in Hong Kong included the operator of the local stock and futures markets, Hong Kong Exchanges & Clearing (HK:388: news, chart, profile) , whose shares jumped more than 16%.
Stock markets in the U.S. finished higher Friday, as investors largely shrugged off weaker employment data for November. The Dow Jones Industrial Average finished up 3.1% to 8,635.42.
New York lost ground initially, before rallying, following the release of data showing U.S. nonfarm payrolls fell by a bigger-than-expected 533,000 last month, the worst such tally in 34 years, and the unemployment rate surged to 6.7%, its highest since October 1993.
"Most equity market players continue to misread the nature and depth of the crisis upon us; no economic stimulus program as such will fix bank's balance sheets and permit credit to start flowing again," Uwe Parpart, chief economist and strategist for Asia with Cantor Fitzgerald in Hong Kong, wrote in a note Monday.
Other Sydney-listed resource companies also trading higher included Woodside Petroleum and BHP Billiton whose shares were up Shares in Invanhoe Australia climbed 13.5% after the miner reported exploration work had indicated promising signs of molybdenum and rhenium deposits at a mine in Queensland state.
Shares of Honda Motor Co. were up 4.8 %. The Japanese automaker announced Friday afternoon it would withdrawal from the Formula One race series immediately in a bid to save cash and realign its engineering and development resources in the deteriorating global sales outlook.
Speculation in Japan had focused on whether Honda's move might prompt the larger Toyota Motor Co to also pull out from racing. Toyota's shares were up 2%.
Isuzu Motors' shares climbed 9.3%, helped by expectations the truck maker's joint venture partner General Motors shares climbed 9.3%, helped by expectations the truck maker's joint venture partner General Motors gained 3.7% to 876.07 and the Nasdaq Composite rose 4.4% to 1,509.30.
