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Asian stocks up on Nasdaq jump

A strong jump in US technology stocks drove Asian markets higher on Friday, helping them end an otherwise negative week on a favourable note.

While only Korea could match the Nasdaq's 4.61 per cent gains, most markets across the region finished stronger after the US technology-laden index posted its first set of three consecutive daily rises since September.

Tokyo's Nikkei index, which hit a 27-month low on Thursday, finished up more than 1 per cent with the momentum from US stocks tempered by supply concerns as banks sell some holdings before the end of the business year.

But while stocks took some relief from the US gains, pessimism about Japan's economic prospects kept up the pressure on the yen, which hit a 17-month low against the US dollar and a 14-month low against the euro.

Hong Kong's Hang Seng Index was up 1.19 per cent at 15,270.03 by 0712 GMT with property issues leading the way. Investment houses said expected interest rate cuts would help the sector.

Any rate cuts would also help the banking sector, while technology and telecom stocks benefited from the Nasdaq gains.

Nasdaq gains a relief

The Nikkei finished at 13,347.74 up 1.11 per cent, with core high-tech issues such as Sony Corp and NEC Corp leading the way.

"The Nasdaq's three-day rally came as a huge relief to the market," said Hiroshi Sato, head of equities products at Cosmo Securities.

"But it's too early to say the market has found a floor," he said, adding that banks and corporations were likely to step up their selling of shares they hold in other firms, as they look for non-operating income to bolster their bottom line before end-March book-closings.

The Nasdaq jumped 116.39 points to 2,640.57 in US trade on Thursday as investors remained positive on technology stocks despite disappointing corporate news from sector leaders.

The Nasdaq is now up almost seven per cent since the start of the year, although the resolve of investors will be tested on Friday after two PC makers, Hewlett Packard Co and Gateway Inc, warned after trade on Thursday that the personal computer market remained weak.

"Old economy" stocks were again left behind, with the Dow Jones industrial average gaining just 0.05 per cent -- and helped by its technology components such as Microsoft.

The US dollar topped 118 yen for the first time since July 1999 in early Tokyo trade and the outlook is for more yen weakness.

The euro also reached a 15-month high just under 113 yen as sellers took heart from signs the Japanese government is happy to watch the yen fall as a way of boosting the economy and stock market.

"The yen's outlook is clouded by pessimism toward the Japanese economy and the nation's financial sector and I think the dollar will rise above 120 yen at some point in the January-March quarter," said Daisaku Ueno, head of the international financial research unit for Nomura Research Institute Ltd.

Korea, Thailand best performers

The Nasdaq gains spurred the Korean market, with the KOSPI surging almost 7 per cent to a 12-month high of 601.09, before closing 4.64 per cent higher at 587.87.

Bargain hunting in the tech sector and Hyundai Electronics Industries' pledge to repay 500 billion won of matured bonds helped market sentiment, with index heavyweight Samsung Electronics and top mobile carrier SK Telecom among the big gainers.

Thai stocks were another standout performer in Asia, the composite SET jumping over 3.5 per cent as positive sentiment on the election of telecom tycoon Thaksin Shinawatra saw the market testing a key resistance level of 306 points.

Thaksin has pledged to set up a national asset management company to take over bad loads, helping banking and finance shares. The electronics sector was helped by the strong performance of the Nasdaq.

Taiwan went against the regional trend, with the benchmark TAIEX index ending the day down 0.56 per cent at 5,339.40 as investors stayed on the sidelines ahead of the Chinese New Year holidays.

"It's a long-holiday effect and investors were unwilling to chase stocks higher," said Lin Lung-hsung, vice-president at United Securities. Taiwan's stock market will close for 10 days starting on January 19 for the Chinese New Year holiday.

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