Rate cut hopes lift Japan shares
Asian stocks rise on expectations of bank rate cuts, but trade remains volatile.
Japanese interest rates are already low by the rest of the world’s standards at just 0.5 per cent.
With the Nikkei having plunged to a 26-year low in a matter of a few weeks, analysts said shares had simply been due for a rebound.
The rebound, however, was also overshadowed by poor results from technology giants Sony and Toshiba, both of whom reported plunging profits after the closing bell.
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Sony reported a 71.8 per cent fall in quarterly profit as growing worries about the global economy and a strong yen hit camera sales.
About 80 per cent of Sony’s sales come from outside Japan and the company is extremely vulnerable to fluctuations in the exchange rates with a rising yen eroding profits.
Last week, Sony slashed its full-year earning projections saying it expected to see profits for the fiscal year until March 2009 slump by 59 per cent from the previous year, with global sales up just one per cent on year.
Also reporting on Wednesday was Toshiba Corp, posting a second-quarter loss of $272.8m for July to September as the global slowdown stripped demand for chips, digital products and home appliances.
The results are a sharp reversal from Toshiba’s $254m profit booked during the same period last year.
Elsewhere in Asia, stock markets had a mixed day with South Korea’s benchmark Kospi index starting the day with a strong rally, rising as much as 7.9 per cent, before slumping again to end Wednesday’s session down three per cent.
The decline ended two days of gains after a week of plunging share prices.
The index was dragged down by shares in South Korea’s five major banks which slid to the stock exchange’s 15 per cent daily limit.
In Hong Kong strong gains on Wall Street overnight helped drag the Hang Seng up more than five per cent during Wednesday’s session, but the index eventually ended the day down slightly by 0.2 per cent.
In Sydney, Australia’s benchmark S&P/ASX200 ended the day up 1.34 per cent after at one point surging by nearly five per cent.