Asian Markets Turn Volatile Following the Fed Rate Cut (MarketWatch) (31-01-2008)

HONG KONG (MarketWatch) -- The main Asian markets had a mixed session governed by a lot of volatility on Thursday. Indexes in Tokyo, Hong Kong, Shanghai and Sydney fluctuated between positive and negative as investors assessed the Federal Reserve's half-point reduction in a key interest rate overnight and the health of the U.S. economy.

Japan's Nikkei 225 average rose 1.7% to 13,565.72 in the afternoon session, after dropping as low as 13,154.77 earlier in the day. The broader Topix index gained 1.7% to 1,341.92.

In Hong Kong, the Hang Seng Index ended the morning session 0.7% down at 23,484, after rising as high as 23,887.17 in the opening minutes. It ended down by 0.84% at 23,455.74. The Hang Seng China Enterprises index fell 2.12% to 12,485.07.

India's Sensitive Index, or Sensex, fell 1% to 17,583.85 by late morning.

China's Shanghai Composite rose as high as 4,487.32 during the session, but couldn't sustain the gains in the wake of brutal weather conditions in south and central China, where tens of millions of people were affected by the worst winter the country has faced in five decades. The index was recently up 0.6% at 4,442.11.

Australia's S&P/ASX 200 dropped 0.7% to 5,580.90, after wavering between 5,448.50 and 5,655.50 during the session. South Korea's Kospi jumped 1.7% to 1,615.73, bouncing off the day's low at 1,570.87, New Zealand's NZX 50 index dropped 0.7% to 3,670.64 and Taiwan's weighted index fell 1% to 7,467.38.

Bank and brokerage shares were hurt on fears about the global financial sector. In Japan some banks ended with narrow gains, such as Mitsubishi UFJ, which gained 0.39% and Mizuho Financials, which added 0.61%, while a very small proportion declined, such as Sumitomo, which declined by 2.32%.

Among exporters, shares of Sony Corp. gained 3% and Hitachi stock advanced 2.7% ahead of their quarterly earnings reports, due later in the day. Shares of Honda Motor Co. climbed 1.2% after it Wednesday posted a stronger-than-expected 38% rise in quarterly profit and lifted its annual earnings forecast, while shares of Canon Inc. sank 5.3%, after it reported a 1.8% rise in quarterly net profit, but missed its targets for both the fourth quarter and the year 2007.

Source: MarketWatch