Asian markets finish Friday lower

Sydney, Seoul, Shanghai, Sensex slump further while NZX 50, Taiex finish higher

Stock market in Asian region mostly lower on Friday, 18 December 2009, as weakness in commodity stocks, especially gold, in the international market as well as weak closing on Wall Street in the previous session impacted market sentiment as investor’s preferred to lock in gains and move to sidelines ahead of looming Christmas and holiday season in most of the global markets

On Wall Street, the Dow finished with a triple-digit loss as a stronger dollar pressured equities and commodities in the afternoon. The Dow Jones Industrial Average fell 133 points, or 1.3%, to 10,308. The S&P 500 slid 13 points, or 1.2%, to 1096 and the Nasdaq was off by 27 points, or 1.2%, at 2180.

On the economic front, weekly jobless claims came in at 480,000 for the week ended 12 December 2009, compared with 473,000 the previous week, which was downwardly revised from 474,000. Continuing claims rose 5,000 to 5.19 million in the week ended 5 December 2009, exceeding forecasts for 5.17 million.

The Conference Board said leading indicators rose for the eighth consecutive month, up 0.9% in November vs. the 0.7% increase that economists had been anticipating. The Philadelphia Fed rose to 20.4 in December.

In the commodity market, crude oil rose in New York, poised for its biggest weekly advance since October, on optimism fuel demand will increase amid improved prospects for a global economic recovery.

Crude oil for January delivery rose as much as 81 cents, or 1.1 percent, to $73.46 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $73.27 a barrel at 8:49 a.m. London time.

Brent crude oil for February settlement rose as much as 70 cents, or 1 percent, to $74.07 a barrel on London’s ICE Futures Europe exchange and traded at $73.74 at 9:59 a.m. local time.

Gold rebounded in Asia, paring a third weekly decline, as the metal’s biggest drop in two weeks lured some investors. Immediate-delivery gold gained as much as 0.9% to 1,109.11 an ounce and was at $1,105.61 at 3:10 p.m. in Singapore, down 0.9% this week. February-delivery bullion on the Comex division of the New York Mercantile Exchange was little changed at $1,106.20, after falling as much as 0.9%.

In the currency market, the U.S. dollar fell against the Japanese yen and euro Friday afternoon in Asia, giving back some of the gains seen overnight after the Bank of Japan, as expected, left its call-rate target and economic assessment unchanged.

The Japanese currency drifted higher to 89.6 against the US dollar up 0.9 percent from yesterday's 13-day low of 90.38.

The Hong Kong dollar was trading at HK$ 7.7574 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 was under pressure on Friday, falling to a fresh 11-week low against a rallying US dollar as anxious investors pared riskier bets into the year-end. The Australian dollar was hovering around US$0.8890, having shed over 2 cents so far this week.

In Wellington trade, the New Zealand dollar dipped below US71c early today for the first time in a week as the greenback soared against a backdrop of improving United States economic data. The NZ dollar was at US71.12c at 5pm, up from US70.98c at 8am, and US71.51c at 5pm, and after having topped US73c a week ago.

The South Korean won closed at 1,176.20 won to the greenback, up 1.70 won from Thursday's close and reversing earlier declines as investors snapped up the local currency.

The Taiwan dollar weakened further against the greenback. The Taiwan dollar was trading lower against the US dollar at NT$ 32.3710, 0.0230 down from Thursday’s close of NT$32.3480.

In equities, Asian share markets were being dragged lower by overnight weakness on Wall Street with resource stocks selling off on weakness in gold and base metal prices.

In Japan, stocks ended the last trading day of the week in the negative terrain following losses on Wall Street and European markets overnight, while resource-related shares were hurt by lower gold prices. Tokyo stocks fell Friday morning as profit-taking hit banking issues after global regulators tabled their proposal for stricter capital requirements, while the yen's advance against the dollar and euro weighed on exporters. Nikkei 225 Stock Average index fell 21.75 points, or 0.21%, to 10,142.05, while the broader Topix decreased 2.69 points or 0.30%, to 893.59.

On the economic front, Bank of Japan decided to leave its policy rate unchanged at 0.1% at the policy board meeting on Friday. The last change in the rate was a 0.10% cut in interest rates at the December 2008 meeting. The central bank said in a statement that Japan's economy is picking up mainly due to various policy measures taken at home and abroad, although there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand. In the conduct of monetary policy, the bank will aim to maintain the extremely accommodative financial environment.

In Mainland China, shares fell for the fourth consecutive day on Friday, led by slacking property shares on concerns that the government will intensify measures to curb property speculation. Moreover, investors took cue from the losses on Wall Street overnight, which in turn led to the sell off of key heavy weight stocks.

There are worries that Chinese property market has witnessed an "abnormal increases" in last few months. Due to a series of supportive measures adopted by the government, China's property sector rebounded strongly this year. Home prices in 70 large and medium-sized cities rose for the eight straight month in October.

The benchmark Shanghai Composite Index lost 2.05%, or 65.19 points, to close at 3,113.89 points. The Shenzhen Component Index tumbled 3.56%, or 476.76 points, to close at 12,914.97 points.

In Hong Kong, stock market fell further following sharp overnight losses on Wall Street and in commodity prices, with developers sliding on concern that China is stepping up measures to curb property speculation, and banks declined after Fitch Ratings said their capital strength is likely to be more strained.

Shares also declined after former Morgan Stanley chief Asian economist Andy Xie said the Hong Kong equities are 30% overvalued and may face a major correction in the next four to five months. Chinese banks capital strength is likely to be more strained than it appears as lenders increasingly use off-balance sheet transactions to free up room for further loan growth, Fitch said.

The Hang Seng Index stumbled 171.75 points, or 0.80%, to 21,175.88, 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 166.38 points, or 1.33%, to 12,334.82.

In Australia, stock markets finished on a lower side, thanks to weaker resources stocks, National Australia Bank and Telstra. A weak lead from Wall Street was part of the reason for the local market’s decline. The benchmark S&P/ASX200 index was 19.8 points lower, or 0.4%, at 4650.5, after falling as low as 4604.7. The broader All Ordinaries fell 17.7 points, or 0.4%, to 4671.9.

On the economic front, the Commonwealth Bank Business Sales Indicator rose by 0.6% in trend terms in November after rising by 0.5% the previous month confirming that consumers are cautiously opening their wallets as a pickup in confidence filters through to increased spending.

In New Zealand, benchmark index registered a modest gain on the last trading day of the week despite losses is most Asia pacific stock markets. The NZX50 advanced 0.99% or 31.31 points to 3154.23. The NZX 15 increased 1.16% or 66.44 points to close at 5737.48.

In South Korea, stocks closed nearly unmoved as a rebounding local currency boosted investor sentiment after early morning jitters fueled by a soaring dollar and overnight setbacks on Wall Street. The benchmark Korea Composite Stock Price Index (KOSPI) inched down 0.8 point, or 0.05 percent, to 1,647.04.

In Taiwan, stock market finished Friday on higher side, snapping the three day losing streak, guided by gains in AU Optronics and other flat-panel makers on hopes of rising demand for computers and flat-screen TVs next year. The benchmark Taiex share index snapped its three days losing streak on Friday, by finishing the day slightly higher by 11.46 points or 0.15% at 7753.63.

In Philippines, equities slid today, following a generally weak undertone in the Asian equities as investors took cues from Wall Street overnight. Extremely negative global cues and worries over a deteriorating external position hurt the Manila stocks. The benchmark index PSEi lost 1.02% or 31.16% to 3,016.99, while the All Shares index fell 0.55% or 10.57 points to 1,890.83.

In India, the key benchmark indices extended losses in late trade on speculation the central bank would tighten monetary policy to help stem rising prices. Intraday volatility was high. The market cut losses soon after an early slide. The market came off the higher level later. The market recovered from lower level after hitting a fresh intraday low in morning trade. The market slumped, reversing course after moving into positive zone from negative zone for a short while in afternoon trade. The market extended losses in late trade with the Sensex ending at the lowest level of the day. The BSE Sensex was down 174.42 points or 1.03% to 16719.83, also the day's low. The S&P CNX Nifty was down 54.05 points or 1.07% to 4,987.70.

Elsewhere, Singapore’s strait times finished the day at 2802.56, just 10.68 points lower while stock markets in Malaysia and Indonesia were closed for holiday.

In other regional market, European shares rose in early trading on Friday. Overall, the U.K. FTSE 100 index rose 0.2% to 5,226.98, the German DAX index rose 0.3% to 5,863.94 and the French CAC-40 index rose 0.1% to 3,836.11