It has been a rough week for Asian stock markets, with investors nervous about the economic impact of the spread of a mysterious virus across the region. But most markets rallied Friday on hope the war in Iraq could end soon.
Asian airlines had a bumpy ride this week. Investors sold stocks after several carriers canceled flights because of the outbreak of Severe Acute Respiratory Syndrome, or SARS. Analysts say this could hurt profits in an industry already battered by the war in Iraq.
In Hong Kong, the epicenter of the outbreak, Cathay Pacific Airways has lost nearly 15 percent since war started in Iraq last month. On Friday, however, the shares climbed 1.5 percent.
Song Sen Wun, an economist with Singapore's GK Goh Securities, says the downturn could be an opportunity to buy these stocks cheaply. "Going beyond the next few months, we don't expect Cathay Pacific or Singapore Airlines to fail. We do expect share prices to be near bottom. Our assumption, as far as investors are concerned, is that this is another rough patch. It also suggests that it may be worth picking up these stocks for a longer term view that economic recovery will follow," he says.
After seeing losses for much of the week, most Asian markets rebounded Friday, lifted by news from the war in Iraq. Reports that coalition forces are only a few kilometers away from Baghdad fueled speculation that the war may be over soon.
Taiwan registered the biggest gain. The weighted index jumped three percent Friday to 4,499. That is half a percent higher for the week.
Hong Kong's Hang Seng Index managed a two percent rise Friday after dropping to a four-year low earlier in the week because of concerns about the SARS outbreak in the territory. The index closed the week at 8,822, down roughly half a percent from last Friday.
South Korea's KOSPI added just over two percent Friday to close at 558.
Australia's S&P ASX 200 ended the week more than one percent higher at 2,933.
Japan's Nikkei 225 average rose just under one percent Friday to end at 8,074, but is 2.4 percent lower for the week.