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Asian markets shrug off US blues

Asian share markets initially took fright on Friday at yet another Nasdaq slump, but many recovered later as investors turned toward the safety of old economy stocks, a move that lifted Tokyo more than 1per cent.

On the currency market, the dollar strengthened slightly against the yen as investors worried about Japan's economic outlook and the resignation of Japan Liberal Democratic Party Secretary General Hiromu Nonaka.

But stock market investors were more focused on the outlook for the US economy and further evidence of a slowdown, which allowed them to shrug off Wall Street's slump in the belief US interest rates might soon drop.

"With interest rates looking like they might fall in the U.S., it seems quite clear that Wall Street will be up tonight," said Intersuisse head of equities Andrew Sekely in Australia.

The technology-laden Nasdaq slid 4.03 per cent to close at 2,597.92 on Thursday -- its lowest level since August 1999 -- and the blue-chip Dow Jones industrial average lost 2.02 per cent to finish at 10,414.49.

In Asia on Friday, Tokyo's benchmark Nikkei average ended 1.28 per cent stronger at 14,835.33, while Australia's S&P/ASX 200 closed 0.29 per cent higher at 3,284.1.

Brokers in Japan said newly launched investment trusts had arrived in the market, looking for safer and less expensive stocks in the "Old Japan" sectors of oil and steel.

"We're seeing more volume returning to the market despite a pretty shaky outlook in technology stocks, and investment trusts seem to be playing a major part in that," said Hirokazu Kabeya, market analyst at Daiwa Institute of Research.

Asia shrugs off Wall Street

South Korea's KOSPI also finished higher as investors took advantage of an early drop of nearly four percent to go bargain hunting for blue-chips. It staged a late jump to 514.46, up 1.03 per cent.

Hong Kong's Hang Seng Index took heart from a strong rebound in China Mobile shares after Beijing announced it had no plans to stop charges on incoming mobile phone calls either this year or next.

The Hang Seng was trading 1.87 percent higher at 14,246.54 at 0600 GMT.

Shares in Taiwan finished on a positive note, with the TAIEX gaining 1.62 per cent to 5,342.06 as late state fund buying recouped earlier losses on the back of Nasdaq's plunge.

Bombay ignored Wall Street's weakness after an initial drop at the open. Shares there were up 0.27 per cent at 4,008.97 by 0600 GMT.

But Singapore and Malaysia felt selling pressure after Nasdaq's fall. At 0600 GMT, the Straits Times Index had dipped 0.3 per cent to 1,946.47, while the Kuala Lumpur Composite Index had shed 1.07 per cent to 722.13.

Shares in the Philippines were also lower, but brokers blamed the fall on fears the domestic economy would take a long time to recover from its current depression. The 33-share composite index lost 1.32 per cent to end at 1,386.25.

Yen under pressure

Economic and political worries kept the yen under pressure against the dollar and euro.

At 0600 GMT, the dollar was trading at 110.48/51 yen compared with 110.34 in late US trade, while the euro was at 96.93/03 yen, up from 96.26 yen in New York.

"The market still believes the yen is weaker than the dollar. But watching troubled US shares and the deteriorating US economy, there should be a limit to bullishness on the dollar against the yen," a Japanese commercial bank dealer said.

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