Asian Markets welcomes Barack Obama with rally

Nikkei, Kospi extends gains while Shanghai, Sydney, Hang Seng shows some rebound

The stock markets across the Asian region welcomed Barack Obama's win with rally, as energy and exporter shares hold on their sharp gains on the hopes that Obama’s administration will reinvigorate the world's largest economy. On Wall Street the celebration began yesterday only as the Dow Jones Industrial Average ended the day up by 305 points, to 9,625. The Nasdaq Composite Index finished higher by 54 points at 1,780. S&P 500 finished higher by 39 points at 1,005.

Oil prices jumped more than 10% Tuesday on signs that Saudi Arabia and other OPEC members had made cuts in crude exports and after global financial markets rallied ahead of the outcome of the U.S. election. However, it fell below US$68 a barrel today, as investors locked in profits from the previous session's rally. At 03:08 a.m. ET, oil was quoted at US$67.70 a barrel, down US$2.83 or 4.01%. The contract for December delivery settled up $6.62 at $70.53 a barrel on the New York Mercantile Exchange on Tuesday.

In the currency market, the U.S. dollar traded in the mid 99-yen levels in late Tokyo deals, down from upper 99-yen range in early trade, but higher compared to Tuesday's close in Tokyo. Chinese yuan weakened to 6.8322 a dollar in over-the-counter trading from Tuesday's close of 6.8240.

The Australian dollar closed 4% stronger as Senator Barack Obama's victory in the U.S. presidential election buoyed market sentiment. The Aussie finished the domestic session at US$0.6917 compared to Tuesday's close of US$0.6653.

The New Zealand dollar climbed strongly overnight to a two-week high against the greenback, as the dollar recorded its biggest one-day drop against a basket of currencies in 13 years, but lost ground during its domestic session Tuesday. The kiwi, however, finished the session higher at US$0.6048 compared to Tuesday's close of US$0.5870.

The South Korean won strengthened against the greenback. The won ended the session at 1,266.0 a dollar compared to Tuesday's close of 1,288.0 a dollar.

The Taiwan dollar closed the session at NT$32.791 to the US dollar down by NT$0.041 or 0.12% compared with the previous close of 32.842.

Coming back in equities, the Japanese stock market closed sharply higher, extending yesterday's sharp gains. After opening on a firm note, the key index briefly pared gains in the afternoon session after Obama's victory, but then climbed back again in the final hour of trade. The benchmark Nikkei Stock Average gained 406.64 points or 4.5% to a three-week closing high 9,521.24. The broader Topix index climbed 56.21 points or 6.17% to 966.91.

On the economic front, the Bank of Japan said that the monetary base in Japan was up 1.4% on year in October to 88.98 trillion yen, extending the 0.9% annual gain recorded in September. On a seasonally adjusted basis, the monetary base was up 6.6% on year at 89.87 trillion yen following a 15.8% annual gain in September.

In Mainland China, the stock market closed higher for the first time in four trading sessions, led by financial and construction-related stocks. In addition the reports that the transport ministry was working on a plan to invest 5 trillion yuan over the next three to five years also boosted investor sentiment. The benchmark Shanghai Composite Index climbed 53.91 points or 3.16% to close at 1,760.61.

In Hong Kong, the Hang Seng Index surged 3.17% to end the trading session at 14,840.16, after advancing in five of the previous six sessions. The Hang Seng China Enterprises Index spiked 5.32% to 7,225.69.

The Australian stock market closed sharply higher after it ended a four-day winning streak on yesterday. The benchmark S&P/ASX 200 index closed up 121.50 points or 2.88% at 4,336.60, its highest close in about a month. The broader All Ordinaries index climbed 117.50 points or 2.82% to 4,287.3.

There was slew of economic data from Australia. On the housing front, data released by the Australian Bureau of Statistics showed that Australia's September residential building approvals declined 7.2% on month and 21.6% on year.

Australia also posted a trade surplus on goods and services of A$1.46 billion in September, up from A$1.24 billion in August. Meanwhile, a report by the Australian Industry Group/Commonwealth Bank revealed that Australian performance of services index or PSI for October fell 2.8 points to 42.1, with readings below 50.0 indicating contraction of activity in the surveyed sector. Australia's services sector saw its seventh straight month of declining activity in October.

The New Zealand stock market rebounded, after it ended a five-session winning streak on yesterday. The benchmark NZX 50 index closed up 41.80 points or 1.47% at 2,886.11 and the broader NZX All Capital index gained 39.0 points or 1.4% to 2,916.6.

On the economic front, Statistics New Zealand said that labor costs rose 3.7% in the year to the June 2008 quarter. According to the agency, salary and wage rates, including overtime, rose 3.55 and non-labor costs rose 4.1%.

The South Korean stock market finished higher for the fifth-straight session, led by financial stocks. The benchmark Korea Composite Stock Price Index or KOSPI closed up 28.15 points, or 2.44%, at 1,181.50, giving away a portion of the 4% gains that it posted in early trading.

On the economic front, the National Statistical Office said that South Korea's retail sales grew 4.6% annually in September as consumers spent more on car fuel, groceries, and recreational products. Total retail sales in September was 20.99 trillion won compared to 20.08 trillion won a year earlier. Meanwhile, industry data showed that sales of imported automobiles in South Korea fell 14.3% from a year earlier to 4,273 units in October, marking the first monthly drop in nearly two years. Additionally, a government report released showed that South Korean exports of information technology products fell 6.4% on year in October due to a sharp decline in overseas demand for semiconductors.

In Philippines, the benchmark index PSEi climbed up 0.15% or 3.17 points to close at 2,006.21. On the economic front, Philippines year-on-year headline inflation rate continued to decelerate at 11.2 % in October from 11.8 % in September brought about by the continued slowing down in the annual price increases of the heavily weighted food, beverages and tobacco (FBT) and services items. Excluding selected food and energy items, core inflation continued to go up at a rate of 7.8 % in October from 7.5 % in September.

The Philippines producer price index for the manufacturing industry went up by 6.4 % in September 2008 compared with the year ago level. On a month-on-month basis, the PPI slightly increased by 0.6 % in September. This was brought about by the price increases exhibited by 13 major sectors led by furniture and fixtures, with a 9.5 % increase. On the other hand, five major sectors reflected flat growth in prices of commodities.

In Taiwan, the stock market finished the day modestly lower after profit taking in transportation and weakness in technology weighed on the index. Taiex, the weighted index, slipped 0.29%, or 14.37 points to close at 4,978.26. On the economic front, the statistical organization of Taiwan will release October data for consumer price index, wholesale price index and foreign reserves.

In India, the markets slipped in red after a firm positive start. At 15:29 IST, the BSE 30-share Sensex was down 576.21 points or 5.42% to 10,060.68.

In the other regional market, European shares ended their best winning streak of the year on Wednesday, as investors paused for breath after Barack Obama swept to victory in the U.S. presidential election. On a national level, the U.K. FTSE 100 index declined 2.1% to 4,550.18, the German DAX 30 index fell 1.4% to 5,206.07 and the French CAC-40 index lost 1.9% to 3,622.63