Foreign Tech Shares Bounce Back
Technology shares rallied in foreign markets on Monday with investors enjoying a day free of the influence of New York’s jittery Nasdaq market, which has been depressed by fears of further U.S. interest rate rises.
European markets mostly gained, and many battered Asian and Latin American stock markets also closed higher.
Meanwhile, the euro currency eased after surging late last week, falling to 92.4 U.S. cents from Friday’s 93.2 cents.
The decline occurred even as more European leaders and central bank chiefs weighed in behind the euro’s tentative rebound to vaunt the currency’s merits on Monday, with France vowing to fight for more stability when it takes over the European Union presidency.
The latest salvo of support for the ailing euro came from Bundesbank chief Ernst Welteke, French President Jacques Chirac, Bank of France Gov. Jean-Claude Trichet and French Finance Minister Laurent Fabius at financial gatherings in Paris.
“The euro is not Monopoly money, or monkey money, as we say in France,” Fabius, who will chair meetings of European finance ministers in the second half of the year, told an international monetary conference.
The euro recently fell to a record low of under 89 U.S. cents, far below its value of $1.17 when it was introduced at the start of 1999.
In stock trading, some European markets may have taken comfort Monday in the sudden wave of political support for the euro--although a weak euro actually has been good for many European exporters.
In Frankfurt, the DAX index rose 1.1%. Paris’ CAC-40 index gained 1.2%. Technology stocks led the way for both indexes.
In Tokyo, stocks rose as investors picked up selected high-tech shares without having to worry about Nasdaq volatility later in the day.
The Nikkei-225 index rose 1.5%, while Hong Kong’s main index gained 1.8%.
South Korea’s main index eased 0.1%, however. The market was rattled by news over the weekend that a top unit of the country’s biggest conglomerate planned to sell assets to avoid a liquidity crunch.
Hyundai Engineering & Construction, one of Korea’s major construction groups, said Sunday it would sell about $484 million in assets, both securities and property, by the second half of this year.
In China, the country’s major bank, the Bank of China, raised bank deposit and lending rates for dollars, the euro and other key foreign exchange currencies after the recent rate hikes by the U.S. Federal Reserve and European Central Bank, state media said.
One-year-fixed dollar deposit rates rose to 5%, the China Securities newspaper said. It did not give comparative figures, but earlier statistics showed China’s one-year dollar deposit rate stood at 4.438%.
Meanwhile, the Shanghai and Shenzhen markets’ class B shares--those available only to foreigners--rallied 8.8% and 9.7%, respectively, on speculation that the government will allow the creation of mutual funds that will permit domestic investors to trade in those stocks.
In Mexico City, the main share index rose 1.3%. The Toronto market rose 0.4%.
