Asian markets continues to mingle on Monday

Nikkei, Shanghai edge higher while Sensex, Hang Seng finish lower

Stock markets in Asian region managed a mixed closing on Monday, 21 December 2009, despite positive cues from Wall Street on Friday as well as higher commodity prices. The mood is cautious ahead of the year-end vacation. Though some of the markets in the region have drifted lower after a steady start, the fall is not much pronounced.

On Wall Street, stocks closed slightly higher Friday, as a strong tech sector helped the major averages overcome a midday swoon caused by a strengthening dollar. The Dow Jones Industrial Average rose 21 points, or 0.2%, to 10,329. The S&P 500 improved by 6 points, or 0.6%, at 1102, while the Nasdaq added 32 points, or 1.5%, at 2212.

In the commodity market, crude oil traded near $73 a barrel in New York after rising last week amid optimism demand will increase as the global economy recovers from its worst recession since World War II.

Crude oil for January delivery was at $73.43 a barrel, up 7 cents, in electronic trading on the New York Mercantile Exchange at 3:13 p.m. Singapore time. The contract, which expires today, rose 1% to $73.36 on 18 December 2009, the highest settlement since 7 December 2009.

Brent crude oil for February settlement rose as much as 57 cents, or 0.8%, to $74.32 a barrel on the London-based ICE Futures Europe exchange. The contract was at $74.09 a barrel at 3:23 p.m. Singapore time.

Gold, little changed in London, may decline as gains in the value of the dollar curb demand for the metal as an alternative investment. Gold for immediate delivery fell $1.28, or 0.1%, to $1,111.92 an ounce at 9:14 a.m. local time. Bullion futures for February delivery on the New York Mercantile Exchange’s Comex unit added 0.1% to $1,112.50 an ounce.

In the currency market, the movement was staying in tight range as the week starts.

The Japanese yen softened against the major currencies today as currency players anticipated more short covering in the greenback in a holiday-shortened week. Japan’s currency was quoted at 90.41 yen per dollar, virtually unchanged from the open.

The Hong Kong dollar was trading at HK$ 7.7539 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 remained on the defensive as its US counterpart maintained its recent turnaround and investors shied away from risk so close to the end of the year. At the local close, the dollar was trading at $US0.8857 from $US0.8905 in New York late Friday, with a lack of liquidity keeping it in a tight $US0.8855 to $US0.8915 range.

In Wellington trade, the New Zealand dollar was little changed ahead of the release of key economic data this week prior to the Christmas holiday break. The NZ dollar was US71.04c at 5pm from US71.16c on Friday, having dropped to a week-low against early on Saturday around US70.65c. The dip occurred when the US dollar rose against most major currencies. Investors who sold the US dollar for most of 2009 are buying it back as the year-end nears.

The South Korean won closed at 1183.70 won to the greenback, down 7.50 won from Friday's close of 1,176.20.

The Taiwan dollar weakened further against the greenback. The Taiwan dollar was trading lower against the US dollar at NT$ 32.3840, 0.0040 down from Friday’s close of NT$32.3800.

In equities, Asian markets finished on a mixed note, with major indexes posting modest moves in pre-holiday trade, as concern about further property-market-cooling measures weighed on Hong Kong but strength in oil shares supported the Japanese market.

In Japan, shares market started the penultimate week of trade in 2009 with positive note, with benchmark Nikkei touches an eight week closing high, tracking strong lead from Wall Street Friday and firmer commodity metal and oil prices. High-tech stocks such as Advantest Corp rose following rises in US rivals late last week. Energy related shares spurted following last week’s gains in oil prices. Prices for January crude climbed about 5% last week. Mining issues saw the gains due to higher commodity metal prices.

At the closing bell, the Nikkei 225 Stock Average index was at 10,183.47, grew 41.42 points or 0.41% from its previous close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange slid 2.11 points, or 0.24%, to 891.48.

On the economic front, the Finance ministry said on Monday that Japan posted a 373.9 billion yen trade surplus in November. Total exports fell 6.2% on year to 4.992 trillion yen, marking the 14th consecutive month of decline but better than the 23.2% drop in October. Imports were down 16.8% on year at 4.618 trillion yen, sliding for the 13th month in a row. Exports to China rose 7.8% to 922.2 billion yen, and shipments to Asia also increased 4.7% to 2.698 trillion yen.

In Mainland China, share market finished the session up, snapping four days of loosing streak, after fluctuating at least ten times in and out of gains line, on short covering after the minister of industry and information technology, Li Yizhong said China is targeting 8% growth in 2010 and also aims for an 11 percent gain in industrial production. Moreover, overall trade moved in a narrow range as market energy dissipated entering the year-end holiday season.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, added 9.10 points, or 0.29%, to 3,122.97, meanwhile the Shenzhen Component Index on the smaller Shenzhen Stock Exchange grew 0.74% or 96.18 points, to 13,011.15. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, put on 0.14%, to 3,396.62.

On the economic front, China's industrial output is expected to post an 11% rise from a year earlier this year, buoyed by the government's stimulus packages, Minister of Industry and Information Technology Li Yizhong said Monday. So far this year, industrial output is up 10.3% for the eleven months against the same period last year.

In Hong Kong, the stock market commenced the first trading day of the week in the negative region, shrank by close, with benchmark Hang Seng index endured losses for fifth day in row on steep losses across major heavyweights of every sector, on tracking weak cues from mainland market. At the closing bell, the Hang Seng Index stumbled 227.78 points, or 1.08%, to 20,948.10, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, shrank 131.65 points, or 1.07%, to 12,203.17.

On the economic front, Employment in Hong Kong's manufacturing sector in September 2009 fell 5.0 percent from a year earlier, the Census and Statistics Department said on Monday.

In Australia, a late sell off saw the Australian market weighing benchmark indices below the gains line after being in positive territory for most of the day, as losses from Telstra, Rio Tinto, consumer staples, and most of the banks weighed on overall sentiment. Energy related shares dived on profit taking. At the closing bell, the benchmark S&P/ASX200 index shrank 15.4 points, or 0.33%, to 4,635.1, meanwhile the broader All Ordinaries slid 12.40 points, or 0.27%, to 4,659.5.

On the economic front, Australian Bureau of Statistics (ABS) data released on Monday showed motor vehicle sales jumped by 5.5% in November to 85,943 vehicles from previous month, fuelled by business federal government’s 50% investment tax allowance that is due to end on December 31. Vehicle sales in the year to November soared by 15.8%.

In New Zealand, equities commenced the first trading day of the week in the negative region inching down slightly, after registering a gain of almost 1% to end the week on Friday. At the closing bell, the NZX50 inched down 0.14% or 4.42 points to 3149.81. The NZX 15 decreased 0.27% or 15.71 points to close at 5721.76.

In South Korea, stock markets closed lower as investor’s unloaded financial shares. After narrow trading, the benchmark Korea Composite Stock Price Index (KOSPI) shed 2.81 points to 1,644.23.

In Singapore, despite a strong start, the share market ended in the red, registering losses for third day in row on tracking poor performance in other Asian bourses and losses in manufacturing and banks shares. The financials were under pressure with losses in DBS and UOB. Properties were with losses in sector heavyweight City Development and CapitaMall amid worries China’s would take strict measures to cool its red-hot real estate market. At the closing bell, the blue chip Straits Times Index was at 2,786.81, slid 15.78 points or 0.6%.

In Taiwan, stock market extended Friday gains headed by AU Optronics on hopes that it could build a panel factory in China soon to tap rising demand following trade talks with Beijing this week. A private report showing strong growth in the global semiconductor capital equipment spending acted as further booster for the sector. The benchmark Taiex share index extended gains over the weekend, by finishing the day higher by 33.64 points or 0.43% at 7753.63.

In Philippines, after opening lower, equities saw an upside bias, closing marginally higher as investors bought some key heavy weight stocks at the end. Investors remained on sideline given the shortened trading week. There will be no trading on Thursday and Friday this week due to the Christmas holidays. The benchmark index PSEi ascended 0.11% or 3.57 points to 3,020.56, while the All Shares index mounted 0.03% or 0.70 points to 1,891.53.

In India, the key benchmark indices slumped to hit fresh day's low in late trade as the dollar index , which measures its performance against a basket of currencies, gained 0.1 % to 77.920, hovering close to a more than three-month high of 78.141 hit on Friday. Higher advance tax figures of India for the third quarter capped the decline. The BSE Sensex was down 118.63 points or 0.71% to 16601.20. The S&P CNX Nifty was down 35.10 points or 0.70% to 4,952.60.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly lower at 1255.66 while stock markets in Indonesia’s Jakarta Composite index slumped 78.19 points ending the day lower at 2431.39.

In other regional market, Europe stocks registered gains in early action Monday, with news on sleeping drugs appropriately capturing attention as volumes wind down ahead of the holiday. The U.K. FTSE 100 rose 0.6% or 30.02 points to 5,227, the German DAX rose 0.6% or 33.73 points to 5,865 and the French CAC 40 up 0.6% or 20.70 points to 3,815.