Friday, 30 July 2004

Asian stocks up, helped by Wall Street

Following Wall Street's rise yesterday -- the Dow Jones Industrial Average closed up 12.17 or 0.1 percent at 10,129.24 while the Nasdaq Composite Index rose 22.80 or 1.2 percent to 1,881.06 -- Asian stocks performed well today.

The Nikkei 225 rose 208.94 or 1.88 percent today to close at 11,325.78, more than making up for yesterday's loss of 87.53 points or 0.78 percent. Taiwan's Taiex index added 1.3 percent to close at 5420.57. The Korea Composite Index rose 4.73 or 0.7 percent to 735.34.

The good performance by equities today came despite some rather poor economic news coming out of Asia. Japanese and South Korean industrial production fell last month as electronics companies sought to curb inventories on concern that global demand will slow. Japanese production fell by a seasonally adjusted 1.3 per cent from May, a government report said, snapping a three-month advance. South Korean output fell by 2 per cent, the government said in Seoul.

It will be interesting to see whether Wall Street holds up as well later today. Just minutes ago, the US Commerce Department announced that the US economy grew at a 3 percent annual rate in the second quarter, slower than most economists had forecasted.

For more on the global economic slowdown, see my article "Growing signs of an economic slowdown".

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