Poor sentiment strikes a blow to Lunar New Year rally prospects
AGENCE FRANCE PRESSE
TOKYO, January 23: Depressed regional sentiment looked set to nullify the customary rally ahead of the Lunar New Year celebrations as markets generally lost ground Friday amid a weakening Indonesian rupiah, dealers said.The rupiah, which hit a historic low of 16,500 to the US dollar on Thursday before recovering to end the week at around 13,000 in Asian trading, has given a sharp blow to overall regional confidence. A revised Indonesian budget containing reforms stipulated by the International Monetary Fund failed to lift the fragile market sentiment. Even the Hong Kong bourse, which gained a meagre 0.4 per cent Friday, was not expected to carry out the customary rally ahead of the Lunar New Year on January 28, dealers said. Despite the regional turmoil, Japanese share prices staged a quick 2.3 per cent bounce on bargain-hunting and futures-linked buying by foreign investors, which dispelled the otherwise cautious mood ahead of the weekend amid the sustained slide of the rupiah, brokers
said. ``Buying interest in futures buoyed the market amid hopes that the government's additional pump-priming measures would invigorate the economy,'' Yutaka Miura at New Japan Securities said. The key Nikkei stock average of 225 selected issues on the Tokyo SE ended 383.42 points higher at 16,789.11, after touching the high of 16,797.10 near the close. The Nikkei 225 index rallied more than four percent over the past week. In Hong Kong, shares closed 0.4 per cent higher on a technical rebound, dealers said. Dealers said the region had little comfort to offer with the Indonesian rupiah testing a new low, adding that the local rebound might not be sustained. The key Hang Seng index gained 36.47 points to close at 8,920.20 points. Singapore share prices closed 0.8 per cent weaker, but off their lows, as lingering concerns over the crisis in Indonesia and higher interest rates weighed on investors. ``That breath of fresh air from the IMF and the promised reforms have become yesterday's news,'' said Glen
Ow, dealer of Ong and Co, referring to an agreement Jakarta inked with the International Monetary Fund this month promising to implement reforms. The benchmark Straits Times Industrials index fell 9.66 points to 1,259.83, while the broader All-Singapore index was lower by 4.11 points to 371.66. At the epicentre of the current crisis, Indonesia, share prices rose 1.7 per cent on selective buying, but dealers said the rise had little to do with a revised budget announced by the government in line with IMF-stipulated reforms since most of the revised budget assumptions had been disclosed earlier. The Jakarta Stock Exchange composite index closed 7.455 points higher at 450.984. In Malaysia, key stock index closed 2.9 per cent lower as investors squared positions ahead of a long break for the Chinese Lunar New Year holidays, dealers said. The Kuala Lumpur Stock Exchange's 100-share weighted composite index fell 16.64 points to end at 558.57, off an earlier low of 548.61.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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