Most Asian stock markets in the red as rebound fizzles out

HONG KONG: A rebound across Asian markets ran out of steam yesterday, with most falling back into the red and extending the previous day’s hammering.

Traders had started the day on a bright note as they took their lead from a surge on Wall Street and ate into Tuesday’s deep losses.

The gains, which saw Tokyo and Hong Kong jump sharply, came as analysts said they had expected a pullback following months of rises that sent world markets to record or multi-year highs.

However, as the day wore on selling began to kick in. By the end of the day, Tokyo had added just 0.2% – having opened almost 30.2% up – while Shanghai lost 1.8% and Seoul plunged 2.3%.

Singapore was down 0.6% and Hong Kong closed 0.9% lower, extending a more than 5% loss in Hong Kong on Tuesday. Wellington, Mumbai and Kuala Lumpur also fell, though Sydney held up to close 0.8% higher while Taipei climbed 1.4%.

Profit-taking also played a big role in the retreat after the buying euphoria, fuelled by optimism in the world economy and strong corporate earnings.

But while markets stutter, analysts remain upbeat.

“The pullback may be considered a healthy correction,” Candice Bangsund, a fund manager in Montreal at Fiera Capital, told Bloomberg News.

“The favourable conditions that have underpinned the stock market rally over the last year remain largely intact at this time – the global expansion continues and corporate earnings remain in acceleration mode.”

Greg McKenna, chief market strategist at AxiTrader, said: “At the moment, the safe bet is that this was part of the so-called ‘sell-off we had to have’.”

In New York, US stocks overturned early losses to trade broadly higher yesterday morning as some buyers returned to a market still shaking from a record fall for the Dow Jones Industrial Average earlier this week.

By 9.42am ET, the Dow was up 127.27 points, or 0.51%, at 25,040.04. The S&P 500 rose 11.5 points, or 0.43%, to 2,706.64 and the Nasdaq Composite was down 10.5 points at 7,102.62.

On Tuesday, the Dow ended almost 570 points, or 2.3%, higher at 24,912.77. – Agencies