Some Asian markets recover; Japan, Hong Kong, South Korea, Taiwan higher

TOKYO (AP) - Some Asian markets rebounded Monday, recovering tentatively from a worldwide plunge set off last week by the U.S. subprime mortgage crisis. The Nikkei 225, benchmark for the Tokyo Stock Exchange, edged up 0.2 per cent to 16,800.05, recouping some of Friday's drop as investors bought back into stocks with strong earnings. Hong Kong's blue chip Hang Seng Index rose 0.45 per cent to 21,891.10.

Still, there was no firm conviction the volatility of the last few weeks has ended.

"The Hong Kong market is in directionless trade. Aftershocks of U.S. subprime mortgage woes are likely to continue rippling through markets in the Asia-Pacific region," said Peter Lai, director of DBS Vickers Securities Ltd. in Hong Kong.

Yutaka Miura, manager at Shinko Securities in Tokyo, said gains Monday weren't expected to be very big, and most investors were waiting to see how the U.S. markets later in the day.

"This was mainly a technical rebound from Friday," he said.

South Korea's benchmark stock index stabilized Monday as well, rising 1.1 per cent to close at 1,849.26. Friday, the Kospi fell 80.19 points, or 4.2 per cent, its third largest point drop ever.

South Korea said Monday that the impact from the U.S. subprime loan crisis on the country is limited, and vowed to deal with any credit squeeze by adding cash to the financial system if needed.

Last week, the U.S., European, Australian and Japanese central banks poured funds into money markets as stocks dropped on concerns over U.S. mortgages.

In Tokyo, the Bank of Japan Monday injected 600 billion yen (US$5 billion) into money markets to try to bring more stability to the markets.

Later Monday, the European Central Bank said that it was injecting cash again into the banking system in a bid to soothe rattled credit markets, but said that market conditions are "normalizing."

The ECB on Thursday provided US$130 billion in funds to banks and injected a further US$83.6 billion on Friday.

Monday in Asia Taiwan's main stock index ended up 0.09 per cent at 8,938.96. In Australia, Sydney's benchmark S&P/ASX 200 index rose 1.27 per cent to 6011.6 after hitting an intraday high of 6040.4. Singapore ended the day 0.64 per cent higher after spending much of the day in negative territory.

Stocks in New Zealand and the Philippines fell, and shares in Thailand were down late in the trading day.

New Zealand shares, which begin trade earliest in Asia, closed lower Monday, despite the later positive rebound in Australia and other Asian markets.

"There was perhaps a suspicion we never really suffered as much as the other markets did last week, so we might just be seeing an element of catch-up in terms of a percentage sell-off," said First NZ Capital research director Barry Lindsay.

The Dow Jones industrials closed out a volatile week Friday on Wall Street, ending with just a 31-point loss for the day and managing to post a gain for the week. Thursday, the Dow fell 387 points and extended a series of triple-digit moves that began in late July.

Stock markets in Europe declined Thursday and Friday as well, unappeased by the ECB's cash injections - the bank's biggest infusion ever.

Friday, the Bank of Japan injected 1 trillion yen (US$8.39 billion) into money markets to curb rises in a key overnight interest rate.

© The Canadian Press, 2007