ASIAN stock markets continued to be dogged by worries about an impending US interest rate rise but that did not prevent Australia's benchmark index from reaching an all-time high yesterday.
The Tokyo market was the region's top performer of the day with the Nikkei 225 chalking up a 1.92% gain to 11,600 points. Only two other Asian markets ended up by more than 1% – Bangkok's SET Index rose 1.18% to 630 and Seoul's Kospi gained 1.07% to 749.
Other markets in the region had a mixed day. The Kuala Lumpur Composite Index (KLCI) closed 3.63 points higher at 825, although losers outnumbered gainers by about two to one.
While trading was light ahead of the US Federal Open Market Committee (FOMC) meeting next week that could lead to a rise in US interest rates, Australia's S&P/ASX 200 raced ahead for the fourth straight day to close at a record 3,554 points. Australia's All-Ords too reached its new record high yesterday at 3,547.
Australian shares received a boost from Telstra Corp's announcement that it planned return A$4.5bil to shareholders over the next three years. Expectation of a good reporting season also contributed to the broad-based rally Down Under, with stocks in the resources, banking and insurance sectors recording strong gains.
Telstra was the most active stock by volume and value, ending up 22 cents, or 4.6%, at A$5.02 with 82 million shares transacted.
News that Telstra would focus on existing operations and pursue moderate scale acquisitions also went down well with investors.
Shares in resource-based companies, which had been enjoying bumper commodity prices, received a further lift from news that Australia's commodity export earnings would rise 14% to a record A$93.5bil as a result of increasing demand from China and strong global economic growth.
According to the Australian Bureau of Agricultural and Resource Economics, the expected jump in commodity export earnings for the year to June 2005 largely reflects higher mineral and energy prices, while exports of livestock products will fall because of drought.
In Japan, expectations of strong economic growth contributed to the rise in the Nikkei and pushed the yen to around 108 to the US dollar – its highest level in six weeks.
The MSCI Asia-Pacific index has risen by 11% since May 17 on optimism that a rebound in the US economy will help ease the impact of a rise in interest rates.
On Bursa Malaysia, analysts noted that interest in equities had once again waned with volume dropping to 209 million shares from 342.7 million two trading days earlier.
TELEKOM MALAYSIA BHD's 30 sen rise to RM10.60 contributed two points to the KLCI's gain.
Among the top gainers was Edaran Otomobil Nasional Bhd (EON), which jumped 60 sen to RM9.70 after the company announced it was distributing, as dividend in specie, 28.1 shares in EON Capital Bhd (ECB), and as capital repayment, 115.5 ECB shares for every 100 EON shares held on July 5.
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