Asian markets turn higher on Thursday

Nikkei, NZX 50 followed gains while Shanghai fell apart

Stock market in Asian region retained their recent gains on Thursday, 3 December 2009, despite of lack of cues from the Wall Street. However, the sentiment remained cautious as markets await the US non-farm payrolls tomorrow.

On Wall Street, the major stock indices finished mixed, after a Fed report showing modest economic improvements followed data showing larger-than-expected private sector job cuts in November. The Dow Jones Industrial Average closed down by 19 points, or 0.2%, to 10,453. The S&P 500 added about a third of a point at 1109 and the Nasdaq advanced by 9 points, or 0.4%, at 2185.

In the commodity market, crude oil rose above $77 a barrel in New York as the dollar weakened, spurring investor demand for commodities as a hedge against inflation.

Crude oil for January delivery rose as much as 57 cents, or 0.7 percent, to $77.17 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $77.11 a barrel at 4:15 p.m. in Singapore. Yesterday, it fell $1.77 to settle at $76.60 a barrel.

Brent crude oil for January settlement rose as much as 76 cents, or 1%, to $78.64 a barrel on the London-based ICE Futures Europe exchange. The contract was at $78.61 a barrel at 4:16 p.m. in Singapore. It fell $1.47, or 1.9%, to end yesterday’s session at $77.88 a barrel.

Gold fluctuated after rising to a record for a third day as investors sought protection against the prospect of currency debasement and inflation, spurring demand for the metal as an alternative asset. Spot gold rallied 0.9% to a record $1,226.56 an ounce before declining as much as 0.3% to $1,212.49. The metal traded up 0.3% at $1,218.78 at 2:35 p.m. in Singapore. Gold for February delivery in New York also climbed to an all-time high of $1,227.50, up 1.2% and last traded at $1,219.70.

In the currency market, US dollar and Japanese yen were once again under pressure on broad based rally in Asian stock markets as risk appetites return. Dollar is also under additional pressure from persistent strength in gold which made another record high of 1227.5 before retreating mildly.

The U.S. dollar traded in the upper 87-yen range today in Tokyo on growing investor speculation Japan may take more quantitative easing steps to get the economy out of deflation and on prospects for currency intervention. The Japanese currency softened for third consecutive day against major counterpart as sign of a recovering global economy increased traders appetite for risk, diminishing the value of lower-yielding currencies. The yen was quoted at 87.74 against greenback.

The Hong Kong dollar was trading at HK$ 7.7501 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 inched higher against the greenback and jumped against the yen as investors welcomed riskier trades after Bank of America said it will repay $US45 billion of taxpayer bailout funds. At the local close, the dollar was buying $US0.9281, marginally higher from yesterday’s close of $US0.9270.

In Wellington trade, the New Zealand dollar was firm against the Australian dollar today even though the Australian dollar was itself in favor with investors. At the local close, the NZ dollar rose to US72.68c from US72.26c in the morning from US72.74c at yesterday closing.

The South Korean won closed at 1,155.3 won to the U.S dollar, down 1.3 won from Wednesday's close of 1,154.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.1220, 0.0480 up from Wednesday’s close of NT$32.1700.

In equities, Japan led stock market gains in Asia as concerns over the strong yen eased, driving shares of exporters significantly higher.

In Japan, shares market extended winning streak for fourth day in row, with the key Nikkei index topping 9,977 for the first time in over five weeks, on the back of strong gains in export related stock such as electronic maker and automakers on the heels of a weaker yen. Softening domestic currencies easing worries over its recent sharp appreciation.

At the closing bell, the Nikkei 225 Stock Average index was at 9,977.67, spurted 368.73 points or 3.84% from its previous close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange gained 29.30 points, or 3.41%, to 888.04.

On the economic front, capital spending by Japanese manufacturers in the July-September quarter dropped a record 40.7% from a year earlier, reflecting growing uncertainty over the economic outlook, despite improvements in profits and sales, Finance Ministry data showed Thursday.

Meanwhile, the finance ministry also said that Japanese corporate capital spending in the July-September quarter fell 24.8% from a year earlier on an all-industry basis.

In Mainland China, share market snapped three days of winning streak, dragged by market heavyweights as investors took profits after the key index rose for three straight sessions. Bank stocks were weak on tracking lower closing of UK and US banks. Properties shares dived amid worries recent gains outpaced prospects for earnings.

The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, tumbled 5.12 points, or 0.16%, to 3,264.62, meanwhile the Shenzhen Component Index on the smaller Shenzhen Stock Exchange declined 0.29% or 40.67 points, to 13,759.84. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, slid 0.19%, to 3,590.47.

In Hong Kong, the stock market escalated extending gains for a fourth straight day on the back of persistent buying momentum among banks, properties, and commodity related stocks, after the price of the base metal rose to record highs and Chinese lender ICBC acquisition hopes.

At the closing bell, the Hang Seng Index spurted 264.3 points, or 1.19%, to 22,553.87, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, escalated 117.89 points, or 0.88%, to 13,459.06.

The International Monetary Fund (IMF), in its Staff Report on Hong Kong released today, recognised the Government's efforts to aid economic recovery and reiterated its support for the Linked Exchange Rate system (LERS).

The IMF sees an economic recovery is under way in Hong Kong, fuelled by growth on the Mainland, supportive government policies and accommodative monetary conditions imported from the US. The economy should steadily strengthen and unemployment should decline in the coming months. Consumer price inflation is projected to be close to zero by the end of 2010.

In Australia, the stocks managed to finish the session above the boundary, after briefly dipping two times below the line as an uninspiring lead from Wall Street. The benchmark All Ordinaries extended winning streak for fourth consecutive day, helped by the gains in retailers’ shares after report stated retail sales rose 0.3% in October to A$19.8 billion. At the closing bell, the benchmark S&P/ASX200 index spurted 12.2 points, or 0.26%, to 4,774.6, meanwhile the broader All Ordinaries surged 12.6 points, or 0.26%, to 4,789.3.

On the economic front, the Australian Bureau of Statistics said retail trade rose a seasonally adjusted 0.3% in October to A$19.75 billion. This follows a decrease of 0.2% in September 2009 and an increase of 0.5% in August 2009.

In New Zealand, equities registered marginal gains, continuing its quiet trading session from yesterday. The share market registered the fourth consecutive session in the positive region. The NZX50 added 0.14% or 4.48 points to 3153.93. The NZX 15 was up 0.07% or 3.80 points to close at 5726.04.

On the economic front, commodity prices in New Zealand rose 10.5% month-on-month in November, the ANZ Bank reported on Thursday. This was mainly due to soaring dairy prices, which increased 22% in November. Commodity prices surged last month for their first annual increase since August 2008 as buyers of dairy products continue to pay a premium as they restock their depleted inventories.

In South Korea, stocks finished higher as technology firms and shipbuilders advanced led by institutional buying. The benchmark Korea Composite Stock Price Index (KOSPI) soared 23.37 points to end at 1,615.00, extending its winning streak to a fourth session.

In Singapore, stocks market rose in choppy trade after fluctuating at least six time in and out of boundary line, following a mixed lead from Wall Street overnight and European market. Investors took profit amid lack of fresh cues, with the mood remaining somewhat cautious, although the Strait index finished in positive terrain on short covering, which emerged in last hour of trading. Financials stocks are well off their highs due to profit taking after recent strong gains. At the closing bell, the blue chip Straits Times Index was at 2,808.18, rose 11.84 points or 0.42%.

In Philippines, the equities ended down as investors booked profits, cutting the recent rally abruptly after the index hit a 21 month high yesterday. The benchmark index PSEi declined 0.93% or 29.05 points to 3,090.91, while the All Shares index erased 0.52% or 10.14 points to 1,915.64.

In Taiwan, stock market stretched its winning streak for fourth flat session, finishing at one week high as financial shares gained after news showing that China’s ICBC is in talks to buy a 20% stake of Cathay in a potential $3.4 billion deal. The benchmark Taiex share index galloped gains for the fourth flat session, by finishing higher by 7.05 points or 0.09% in a day, closing at 7684.67, the highest closing since 26 November 2009 when market finished the day at 7739.16.

On the economic front, Taiwan’s excess national savings rate is expected to grow to 11.01% this year, above the 10% level for the first time in 22 years. According to the Cabinet-level Directorate General of Budget, Accounting & Statistics (DGBAS), with excess savings being defined as national savings minus investments.

In another release from the Cabinet-level Directorate General of Budget, Accounting & Statistics (DGBAS), Taiwan is likely see a record trade surplus of US$29.9 billion in 2009 and the figure for 2010 is very likely to remain the same.

In India, the key benchmark indices retraced from 1-1/2 month highs after comments by a top economic adviser and data showing a surge in food price inflation reinforced market expectation of a hike in cash reserve ratio by the central bank to suck out excess liquidity in the banking system.

The BSE 30-share Sensex was up 15.77 points or 0.09% to 17,185.68. The Sensex gained 191.36 points at the day's high of 17,361.27 in afternoon trade, its highest since 20 October 2009. The S&P CNX Nifty was up 8.45 points or 0.16% to 5131.70. It hit a high of 5,181 in intraady trade, its highest since 20 October 2009.

Elsewhere, Malaysia's Kula Lumpur Composite index finished higher at 1272.35 while stock markets in Indonesia’s Jakarta Composite index gained 19.06 points ending the day higher at 2500.04.

In other regional market, European shares moved higher for the third straight session on Thursday in a broad-based move, with Peugeot among notable gainers on a possible alliance with Mitsubishi Motors. On a regional level, the U.K. FTSE 100 index rose 0.6% or 33.19 points to 5,361, the German DAX index climbed 0.9% or 53.75 points to 5,836 and the French CAC-40 index advanced 1% or 37.43 points to 3,833.