Asian Markets Follows Wall Street Rise

Shanghai leads the regional rally as Nikkei, New Zealand snaps losing streak

The stock markets across the Asian region closed the day higher amid volatility, after Wall Street rebounded over night on bargain hunting following Monday's sharp decline.

The Dow rose 270.0 points or 3.3% to 8,419.1, the S&P 500 index climbed 32.6 points or 4.0% to 848.8, and the Nasdaq composite index gained 51.7 points or 3.7% to 1,449.8.

In the commodity market, crude oil prices rose in the Asian session, ahead of U.S. inventory data, after the contract fell overnight on fears about weakening demand due to a global slowdown. January light sweet crude oil futures were up as much as 67 cents to $47.63 a barrel. The front-month contract ended at its lowest level since May 20, 2005 in Nymex trading Tuesday, falling $2.32 to $46.96 a barrel.

Coming to the equity market, Japanese stock index Nikkei snapped two days of losing streak to finish the session 1.8% higher on bargain hunting following steep declines in the previous two sessions and as hopes grew of a rescue of the Big Three US automakers.

The Nikkei 225 Stock Average gained 140.41 points, or 1.8%, to 8,004.1, off the day’s high of 8,056.38 and a low of 7,889.82. The broader Topix climbed 12.94 points, or 1.6%, to 800, off the day’s high of 803 and a low of 788.

In Mainland China, the Shanghai stock exchange recoil its yesterday losses with strong gains in banks and financials on news that a unit of China’s sovereign wealth fund has increased its stake in the China Construction Bank and the government plans to spend hugely on infrastructure to stimulate the economy. Meanwhile, miners and metal stocks outperformed on hopes demand would boost on the government's infrastructure spending. The benchmark Shanghai Composite Index closed up 75.78 points or 4.01% at 1,965.41. The Shenzhen composite index gained 3.90% closing the day at 584.43.

In Hong Kong, the share prices closed stronger, though off their highs, led by China stocks as the Shanghai market gained over 4% and investors continued to hope for further stimulus measures from Beijing. The Hang Seng index closed up 182.81 points or 1.36% at 13,588.66, off a low of 13,573.43 and a high of 13,778.05. The Hang Seng China Enterprises index was up 230.06 points or 3.29% at 7,232.54.

The Australian S&P/ASX 200 climbed 1.3% to 3,573.50. According to the data released by the Bureau of Statistics the gross domestic product expanded 0.1% in the third quarter from the second, falling short of an expected 0.2% expansion. On annualized basis the economy expanded 1.9% during the quarter, showing the economy remains on track for annual expansion this year, although well short of its long-term average growth of 3%.

The New Zealand stock market closed higher for the first time in three days on the back of gains in US markets. The benchmark NZX 50 index closed up 55.6 points or 2.1% at 2,706.8 and the broader NZX All Capital index gained 55.0 points or 2.0% to finish at 2,746.8.

On the economic front, commodity prices in New Zealand plunged for a fourth consecutive month, declining 7.2% in November, according to ANZ. The index has posted a cumulative fall of 21% since July 2008, with pelt prices recording the biggest fall.

The South Korean stock market closed lower, extending its losses for a third straight trading session. The benchmark Korea Composite Stock Price Index or KOSPI was down 0.53 points or 0.05% at 1,022.67.

On the economic front, the Bank of Korea said that South Korea's foreign exchange reserves continued to fall in November mainly due to liquidity injections meant to ease an ongoing credit crunch and financial jitters. The nation's foreign reserves totaled $200.5 billion as of end-November, down $11.7 billion from $212.25 billion a month ago. Foreign reserves fell the eighth straight month.

In India, amid a see-saw trade the key benchmark indices close the day slightly higher. The BSE 30-share Sensex was up 8.19 points, or 0.09% closing the day at 8747.43.

Elsewhere, Singapore’s strait times gained marginally by 1.39 points or 0.08% closing the day at 1640.57; Malaysia's KLCI closed up 0.21% at 847.53; and Indonesia's Jakarta Composite index gained by 0.10% at 1,192.53. Taiwan’s Taiex closed the day 49.72 points or 1.14% lower at 4307.26

In the other regional market, European shares slipped in the early trading hours, with electricity group EDF leading the decline after it offered to buy a 50 percent stake in Constellation Energy Group Inc's nuclear business. The German DAX 30 index dropped 1.9% to 4,445.37, the French CAC-40 index fell 1.4% to 3,107.39 and the U.K. FTSE 100 index lost 0.8% to 4,090.91.