MUMBAI/HONG KONG, January 13: A day after Peregrine Investments went in for liquidation, markets around the world staged a technical rally. The Mumbai Stock Exchange closed Tuesday with a rise of 36-point to 3431.72 in Sensex. In other Asian markets, Hong Kong led the recovery which was followed by Indonesia.Though the Indian markets recovered its ground partly, market sources said foreign institutional investors (FIIs) continued to press sales in key scrips in the A group. Brokers feared that more disasters could strike the Asian markets, especially Hong Kong. A cross-section of brokers felt that FIIs will delay their fresh allocations for India. ``Aggressive selling by FII operators punctured the market sentiments which mirrored on the Sensex which continued to fluctuate in the band of 3,417.05 and 3,479.95,'' brokers said.
The South-east Asian financial crisis is having a direct effect on foreign brokerages in the country. Jardine Fleming India Securities, the securities arm of the Hongkong-based
Jardine Fleming, has made ``minor changes'' in its staff strength at Mumbai. Some of the other foreign brokerages too are understood to be feeling the pinch.
Asian markets recovered some poise on Tuesday, buoyed by reassuring news from Indonesia and a recovery on Wall Street. New York's strong performance -- Wall Street closed up nearly 67 points higher -- and encouraging words from US Deputy Treasury Secretary Lawrence Summers in Indonesia helped to restore some confidence in Asia.
Indonesian share prices jumped a spectacular 9.1 per cent in heavy trade, up 31.900 points at 382.137, with the market buoyed by ongoing talks between the government and the International Monetary Fund (IMF).
Hong Kong was also stronger as share prices surged 7.4 per cent for the first gain of the new year, rebounding from a steep plunge of 8.7 per cent the previous day, on the back of Wall Street's resilience. Hong Kong dealers said sentiment was still cautious amid fears of further increases in interest rates and possible
deterioration in ailing regional markets.
The key Hang Seng index gained 598.94 points to close at 8,720.00 following seven consecutive sessions of losses, after Wall Street overnight reversed a sharp early slide and ended higher.
Hong Kong traders said the influence of Peregrine Investment Holdings' announcement of liquidation on Monday had been overstated. They said that, in fact, Friday's 222-point slump in New York had driven Hong Kong's 8.7-percent rout on Monday.
"I don't think it was anything to do with Peregrine at all," one trader said. "There was a 220-point fall in America, and that market potentially has a very, very long way to fall." Tokyo bucked the Asian trend on Tuesday, falling 63.53 points to 14,727.97 in normal trading despite reports that a man believed to have a gun had entered the Tokyo Stock Exchange.
A police spokesman said the gunman was holding an exchange employee hostage on the building's 14th floor demanding that trading be halted and that Finance Minister Hiroshi
Mitsuzuka come to the exchange. The incident set off panic among traders, but trading continued normally.
Jakarta led Asia's move higher, with stocks soaring 6.54 per cent higher on the bid by the US Treasury and the IMF to pull Indonesia out of crisis. In Hong Kong the Dow Industrials closed 66.76 points higher at 7,647 after shedding 130 points in early trade on Monday.
Currencies in Asia stabilised on renewed hopes of a solution to the Indonesian crisis. Deputy Treasury Secretary Summers said on Tuesday that Indonesian President Suharto recognised the need for strong steps on economic reform.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
