Asia Ends Week With Strong Gains

Asia markets posted strong gains Friday, led by the Hang Seng (+2.26%). Tokyo's Nikkei (+1.5%) and the Shanghai Composite (+1.15%) were also up sharply.

Tech stocks led gains in Japan following gains in U.S. tech stocks, though some traders said Friday's gains were no more than a technical rebound led by index futures. The Nikkei is closed Monday for a national holiday. "I think tech shares were mostly moved by index-related trades since they weigh heavily on the Nikkei average," said Maruwa analyst Masayuki Otani. Gains grew in the afternoon session after the Wall Street Journal said Merrill Lynch may receive a capital infusion of up to $5 billion from Temasek Holdings of Singapore.

China's interest rate hike Thursday was welcome news to Hong Kong investors, reducing an overhang in the market (China Hikes for Sixth Time This Year; BoJ Holds). "The Christmas rally is finally kicking in," said John Schofield. "The psychology of the market is finally changing and the latest interest rate increase (by China) is good news. It's been such a bad six to eight weeks... we'll see a reasonable uptick in the last week of the year."

China Unicom (CHU) was up a strong 4.8%; it's now up 63% over the past year. TDK (TDK) gained 4.6%; Hitachi (HIT) gained 3.6%; Honda (HMC) was up 3%; China Life (LFC +2.9%), CNOOC (CEO +2.6%) and China Mobile (CHL +2.2%) were among Asian gainers that trade on U.S. Markets. Mitsubishi UFJ Financial Group Inc. (MTU) lost 1.2%.

Sources: Reuters I, II
Additional Reading: When Times Are Tough, a Chinese Friend Steps In

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