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Japan, Hong Kong stock markets rebound

Japan, Hong Kong stock markets rebound

Asia's biggest stock markets in Japan, Hong Kong and South Korea recovered Tuesday after the previous day's sharp decline, but other regional indices sank amid persistent worries about a worldwide recession.
In Tokyo, where the benchmark Nikkei 225 index plunged to a 26-year low Monday, investors bought up beaten down shares like Toyota, Sony and Honda. The index was up 2.7 percent in afternoon trading at 7,356 after falling earlier.
Hong Kong's Hang Seng index rebounded after tumbling 12 percent Monday, rising nearly 6 percent to 11,652.64 South Korea's Kospi also recovered after falling earlier, jumping more than 5 percent to 996.69.
"Sentiment turned positive in the afternoon session thanks to sharp gains in the Hong Kong stock market," said Yutaka Miura, senior strategist at Shinko Securities in Tokyo. "Investors were now buying back after the Nikkei index slipped below the 7,000-level in the morning."
He said the dollar's gain to nearly 94 yen from below 92 yen also helped investors buy Japanese exporters, whose earnings are eroded by a strong yen.
Castor Pang, analyst at Sun Hung Kai Financial, said market sentiment in Hong Kong was somewhat better Tuesday, but said the Hang Seng was mostly reacting to the previous day's big loss.
"It's only a technical rebound," he said.
In South Korea, the buying was driven by domestic investors following the biggest rate cut ever by the central bank on Monday, analysts said, even as foreign investors kept selling to get cash to meet redemptions and liquidity needs at home. Data showed that foreigners, who have been dumping shares at a record pace this year, remained net sellers Tuesday.
"Korean domestic investors are buying stocks and futures," said Shim Jae-youb, a strategist at Meritz Securities in Seoul.
Attention in Japan, Asia's biggest stock market, was also focused on earnings reports. Honda Motor Co., electronics maker Panasonic Corp. and brokerage Nomura Holdings Inc. were due to announce results later in the day.
In a volatile session Monday on Wall Street, the Dow Jones industrial average fell 203.18, or 2.42 percent, to 8,175.77 after earlier rising by as many as 220 points. Most of the decline came in the final 10 minutes of trading. Broader indicators fell more.
Currency traders were on guard over possible moves by Japanese authorities to intervene in the market and cap the yen's rise after a Group of Seven advanced nations raised concerns over gains Monday.
"Investors are trading with caution over the Bank of Japan's intervention to curb the yen's rise," said Mitsuru Sahara, vice president of the foreign exchange division at Bank of Tokyo-Mitsubishi UFJ Ltd.
Though not a force in the currency markets in recent years, the Japanese central bank, at the behest of the nation's Finance Ministry, has stepped into the market massively in the past to buy U.S. dollars and sell yen at times of yen strength.
Elsewhere, Australia's key stock measure was down 0.2 percent, while China's Shanghai index was down nearly 6 percent.
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Associated Press writer Shino Yuasa in Tokyo contributed to this report.


Updated : 2021-05-08 11:36 GMT+08:00