ASIAN stock markets rose yesterday, buoyed by the overnight rally on Wall Street on robust US company earnings and indications that the Severe Acute Respiratory Syndrome (SARS) outbreak may be easing.
Airline and travel-related stocks, which have been hard hit since the SARS outbreak in mid-March, were among the top gainers. The easing of tension between the US and North Korea appears to have helped investor sentiment in the region as well.
An analyst said all this was definitely good news for stock markets, which have been depressed owing to the war on Iraq and outbreak of SARS. But he felt that the local stock market tended to lag behind other Asian markets.
The KLSE Composite Index closed at 628, up 3.9 points on its previous close but off its day's high of 629.9. Dealers felt it was more of a technical rebound. A dealer said the market was moving sideways, but added that it might test the 614 level soon.
Gaming and leisure companies Genting Bhd and Resorts World Bhd were the top gainers yesterday; Resorts rose 45 sen to RM8.05, and Genting 40 sen to RM11.90.
The Hong Kong stock market was the biggest gainer among the regional bourses yesterday, adding 309 points or 3.7% to 8,744 –despite 12 more deaths from SARS and 15 new cases being reported – for its biggest percentage gain since Nov 4 when it added 2.8% to 8,680.
No new SARS cases were reported in Singapore, where the market added 43 points to 1,284, despite a 71% decline year-on-year in visitor arrivals for the week to April 21. The Taiwan market gained 60 points to 4,200. Tokyo was closed for a holiday.
In South Korea, the Kospi recorded its biggest gain in three weeks, rising 5% or 28 points to 597 on news that North Korea had offered to end its nuclear weapons programme in return for concessions from the United States.
With concerns over a nuclear threat that would slow economic growth in the region easing, the Korean won and Japanese yen celebrated. Against the US dollar, the yen strengthened to 119.77, its first rise in two weeks.
Asian bourses were supported by big gains in US stocks following solid results from blue-chip companies McDonald Corp and Procter & Gamble. Bullish earnings expectations had sparked optimism of a rebound in the US economy. On Monday the Dow Jones Industrial Average finished 2% higher at 8,471, its biggest rally since April 2.
Airlines stocks rallied between 3% and 7% in yesterday's trading after weeks in the doldrums. Cathay Pacific Airways Ltd was the biggest winner on the Hong Kong market, surging 6% to HK$9.30.
According to Bloomberg, shares in the airline have lost about a quarter of their value since the SARS outbreak. The airline has cancelled 45% of its flights since last month and is considering paring its dividend payout to shareholders.
Singapore Airlines Ltd rose 4% to S$9.30, Qantas Airways 6.6% to A$3.04 and Malaysia Airlines (MAS) 3.2% or 10 sen to RM3.26.
MAS, which has cancelled 716 flights since the SARS outbreak, now plans to concentrate on the domestic market and non-SARS affected areas.
It has also announced a 50% discount on domestic packages to offset the fall in international travel.
Although yesterday was a good day for the regional bourses, dealers remained cautious as they wanted to see how China, where new cases of SARS are still being reported, addressed the matter.