Asian markets reveals mixed trend

Shanghai, Seoul, Nikkei, Hang Seng ends higher while Sydney, Sensex, NZX 50 drift downward

Stock market in Asian region exhibited cautiously optimistic mood on Friday 9 October 2009, thanks to the overnight rally on Wall Street on the back of encouraging economic and corporate news. Most of the markets in the region started off on a strong note, but only few pared early gains.

In the commodity market, crude oil fell in New York, paring its weekly gain, as the dollar climbed after Federal Reserve Chairman Ben S. Bernanke said monetary policy may be tightened once the economic outlook has improved sufficiently.

Crude oil for November delivery fell as much as 66 cents, or 0.9%, to $71.03 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $71.16 at 2:11 p.m. Singapore time. Yesterday, it rose $2.12 to settle at $71.69.

Brent crude oil for November settlement dropped as much as 71 cents, or 1 percent, to $69.06 a barrel on the London-based ICE Futures Europe exchange. The contract was at $69.19 at 2:31 p.m. in Singapore. Yesterday, it rose 3.8% to end the session at $69.77, the biggest gain since 30 September 2009.

Gold dropped in London for the first time this week, paring its biggest weekly advance since April, as a stronger dollar cut demand and some investors sold the metal to lock in gains from its climb to a record. Gold for immediate-delivery bullion slid $9.20, or 0.9%, to $1,045.90 an ounce by 9:19 a.m. London time. The metal climbed to a record $1,061.55 yesterday and is set for a seventh weekly gain in eight. December gold futures were 0.9% lower at $1,047.10 an ounce on the New York Mercantile Exchange's Comex division.

In the currency market, the U.S. dollar was higher against the yen after U.S. Federal Reserve Chairman Ben Bernanke said in early Asian hours that the U.S. central bank will be ready to tighten policy.

The Japanese yen strengthened against major currencies. The Japanese yen was quoted at 88.75 against the greenback.

The Hong Kong dollar was trading at HK$ 7.7502 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In Sydney trade, the Australian dollar trimmed some of its impressive gains on Friday but managed to hold above 90 US cents, buoyed by the likelihood interest rates at home will rise faster than elsewhere. The US dollar earned a reprieve after US Federal Reserve Chairman Ben Bernanke indicated that monetary policy might have to be tightened there as a recovery takes hold.

By the local close, the Australian dollar was buying 90.34 US cents. It was also buying 80.62 yen, 56.4 pence and 61.36 euro cents. The dollar was up about 3 per cent for the week against the greenback.

In Wellington trade, the New Zealand dollar squeaked briefly above US74.50c for the first time in more than 14 months as some good economic news pushed investors towards riskier assets.

Growing optimism of a burgeoning economic recovery saw the US dollar fall to a 14-month low against a basket of currencies as demand for riskier assets grew at the expense of the safe-haven greenback. From US73.99c at 5pm yesterday, the kiwi reached US74.52c early today before easing to US74.30c by 8am.

The South Korean won closed at 1,164.5 won to the U.S. dollar, up 2.5 won from Thursday's close and a fresh yearly high, as rallies in global equities stoked investors' appetite for risk.

The Taiwan dollar weakened against the greenback. The Taiwan dollar was trading lower against the US dollar at NT$ 32.2330, 0.0900 down from Thursday's close of NT$32.1430.

In the Asian equity market, most of the major Asian markets ended higher with Shanghai surging as trading resumed after a string of holidays, while Japanese shares rallied on the back of a modest pullback in the yen.

In Japan, shares market endured gains for fourth consecutive day, with materials and resources got a boost as commodities prices rallied. Export related stocks bounced as halt in the yen's raise prompted investors to test the upside amid optimism the global recovery gaining traction, meanwhile the retailers posted strong gains following the upbeat US retail sales data. At the closing bell, the Nikkei 225 Stock Average index rose 183.92 points or 1.87%, to 10,016.39, while the broader Topix was up 10.24 points, or 1.15% to 897.83.

In Mainland China, share market soared on the first trading day after the eight-day National Day holiday, with broad based gains across the sector on strengthening optimism a recovery in the economy was sustainable after reports that Liu Mingkang, chairman of the China Banking Regulatory Commission, predicted that China's GDP growth will exceed 8% in September. The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, surged 132.29 points, or 4.76%, to 2,911.72, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, added 5.29%, to 3,163.71.

In Hong Kong, the stock market ended morning session slightly higher with benchmark indices managed to hold winning streak for fifth consecutive day, after oscillating in and out of boundary at least four times. Banks and financials extended gains on expectations that Chinese policymaker might raise interest rates, following a similar move by Australia. Properties stocks rose on hopes a rebound in the global economy would fuel demand for real estate. The Hang Seng Index rose 6.54 points, or 0.03%, to 21,499.44, while the Hang Seng China Enterprise added 40.22 points, or 0.32%, to 12,496.06.

In Australia, the shares market finished the choppy session in south direction, snapping three days of winning streak after hovering in and out of boundary line despite a positive start, as investors looked to book profits ahead of the weekend. At the closing bell, the benchmark S&P/ASX200 index slid 15.70 points, or 0.33%, to 4,752.9, meanwhile the broader All Ordinaries has shed 8.8 points, or 0.18%, to 4,754.6.

In New Zealand, stock market ended the last trading day of the week in the negative terrain after inching up by almost 1% yesterday. Although the share market edged up during early trade, the share market was unable to maintain the momentum to end the session down almost 0.2%. The NZX50 fell 0.18% or 5.68 points to 3163.25. The NZX 15 declined 0.43% or 24.73 points to close at 5739.75.

On the economic front, as per the 2008-2009 Annual Report released by the Reserve Bank on Friday, New Zealand has escaped major damage in the worst global financial crisis in decades, but the experience has highlighted imbalances and vulnerabilities. The Reserve Bank's role is supposedly only to implement the country's monetary policy and provide financial stability - but this year it's provided a stunning profit as well. The just released annual report shows that for the year to June the RBNZ made a whopping $906 million profit - giving the Government a chunky and no doubt welcome $630 million dividend cheque into the bargain.

In South Korea, stocks closed higher as investor sentiment was buoyed by the central bank's interest rate freeze. The benchmark Korea Composite Stock Price Index (KOSPI) jumped 31.33 points to 1,646.79.

In Singapore, stock market was little changed in the north direction, extending winning streak for fifth consecutive day, after hovering most of time around in and out of boundary line. Shares of banks and properties were in diverse terrain amid bout of profit booking and buying at lower level, meanwhile manufacturing shares and other major blue chip rose on strengthening optimism about the global economic outlook. The blue chip Straits Times Index was ended at 2,652.51, gained 1.56 points or 0.06%.

In Taiwan, stock market once again finished the Friday on fabulous note, giving a right finish for the week. The gain was supported by the news that China and Taiwan are gearing up for the talk on cross-Strait Economic Cooperation Framework Agreement (ECFA), scheduled for inauguration in lat October. n Taiwan, the benchmark Taiex share index took a turnaround on Friday by ending the day higher by 68.65 points or 0.91% in a day, closing the day at 7571.96. For the week, the index spurted 160.08 points or 2.15% of its value.

In Philippines, equities bucked the trend in the other regional markets to trend lower today as selling pressure emerged after the market consolidated in a range in last few days. The failure of the key 3000-point level to be breached on the upside turned the sentiments around as the market participants preferred to sell the stocks ahead of weekends. The benchmark index PSEi lost 0.85% or 25.24 points to 2,942.78, while the All Shares index fell 0.40% or 7.51 points to 1,850.76.

In India, the key benchmark indices lost ground as lower European stock started lower and fall in US index futures triggered profit taking. Intraday volatility was high. The BSE 30-share Sensex was down 200.88 points or 1.19% to 16,642.66. The S&P CNX Nifty was down 57.05 points or 1.14% to 4,945.20.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.30% or 3.73 points to 1233.82 while stock markets in Indonesia's Jakarta Composite index ended the day lower at 2474.40.

In other regional market, European shares looked set to end a broadly positive week on a muted note after miners shaved off some gains as gold futures backed away from recent highs. On a regional level, the U.K. FTSE 100 index rose 0.1% to 5,157.26, the German DAX index increased by 0.1% to 5,720 and the French CAC-40 index trading flat at 3,805.90.