Asian markets witness mixed Monday

Nikkei, Shanghai, Taiex post good gains while Sensex, Hang Seng, Sydney ends in red


Stock market in Asian region demoed a mixed trend on Monday, 7 December 2009, as investors turned cautious over the uncertainty over upcoming events, including U.S. retail sales data. Investors are seen indulging in profit taking in some markets after recent strong rallies. While markets in Japan, China and Taiwan were seeing some strong buying, most of the other markets in the region were seen struggling a bit to make headway.

On Wall Street, a strong job report pushed stocks considerably higher but a strong US dollar and weaker than expected factory orders report kept the gains under check. Still, the financial sector managed to end the day with solid gains. The Dow Jones Industrial Average ended higher by 22.07 points at 10388.22. Nasdaq ended higher by 21.21 points at 2194.35. S&P 500 ended higher by 5.96 points at 1105.88. The Dow was up by more than 121 points at one point of time.

On the economic front, the Labor Department reported that U.S. non-farm employment fell by 11,000 in November. In addition, previous months were revised to reflect fewer job losses. In turn, unemployment decreased to 10.0%, from the previous reading of 10.2%. Meanwhile, the average work week in November clocked in at 33.2 hours, a tick higher from the 33.1 hours consensus and 33.0 in October. In a separate piece of economic report, the headline jobs numbers were overshadowed by news that factory orders for October increased 0.6%, which is better than the flat reading that had been expected, but not as strong as September’s 1.6% increase.

In the commodity market, crude oil bounced off a seven-week low on speculation above-average global fuel stockpiles will decline as demand picks up with the economy recovering from the worst recession since World War II.

Crude oil for January delivery climbed as much as 63 cents, or 0.8%, to $76.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $75.65 a barrel at 3:40 p.m. Singapore time.

Brent crude oil for January settlement rose as much as 73 cents, or 0.9%, to $78.25 a barrel on the London-based ICE Futures Europe exchange. The contract was at $77.85 a barrel at 3:40 p.m. Singapore time.

Gold extended a retreat from a record, dropping for a third day, on speculation that an improving U.S. economy will result in higher interest rates, potentially boosting the dollar and cutting demand for the precious metal. Gold for immediate delivery, which touched a record $1,226.56 an ounce on 3 December 2009 dropped as much as 1.5% to $1,144.34, and traded at $1,156.84 at 2:24 p.m. in Singapore. February-delivery futures on the New York Mercantile Exchange’s Comex unit slid as much as 2.1% to $1,145 an ounce.

In the currency market, US dollar traded with a soft tone today as markets digest last week's sharp post-NFP moves.

The Japanese currency strengthened first time in five days on speculation Japanese companies are bringing back overseas earning. The yen was quoted at 89.88 against greenback from 90.56 on 4 December.

The Hong Kong dollar was trading at HK$ 7.7503 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 closed lower on Monday in response to a strengthening in the US dollar on the back of more positive US unemployment news. At local close, the Australian dollar was trading at $US0.9154/57, down 0.77 per cent from Friday's close of $US0.9224/26.

In Wellington trade, the New Zealand dollar fell against the greenback, which strengthened broadly after data showed the United States lost far fewer jobs than expected last month, bolstering hopes the US economy is on a stable path to recovery. The NZ dollar was at US71.14c at 5pm, down from US71.55c at 8am and US72.22c at 5pm yesterday.

The South Korean won closed at 1,153.30 won to the U.S dollar, down 0.3 won from Friday's close of 1,153.

The Taiwan dollar weakened against the greenback. The Taiwan dollar was trading lower against the US dollar at NT$ 32.2290, 0.0590 down from Friday’s close of NT$32.1700.

In the equities, Asian stock markets closed mixed despite a stronger cue from Wall Street, as resources stocks fell across the region although Japanese exporters rallied after the yen's losses Friday.

In Japan, shares market extended winning streak for sixth consecutive day, buoyed by strong gains in export related stocks after yen softened to lower 90 yen level, helped by as stronger-than-expected U.S. jobs data last week. Shares of chip equipment makers rose on rating upgrade from the Nomura Securities Co. Shipping companies shares advanced after the Baltic Dry index added 1.1% on Friday. At the closing bell, the Nikkei 225 Stock Average index was at 10,167.60, spurted 145.01 points or 1.45% from its previous close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange gained 9.35 points, or 1.05%, to 898.93.

On the economic front, the ministry of finance said today in a report that Japan's reserve assets totaled $1,073,712 million as of November 30, 2009, up $16,943 million from the end of October. As of November 30, foreign currency reserves amounted to $1.02 trillion, while reserves with the International Monetary Fund stood at $4.43 billion. Gold reserves totaled $28.93 billion, while SDRs were worth $21.54 billion.

The number of single-family houses and condominium units auctioned off in Japan jumped 46.3% from a year earlier to 30,180 between April and September amid high unemployment and falling incomes, a real estate industry group said Sunday.

In Mainland China, share market finished the choppy session higher on the wave of short covering in last hour of trading after Chinese President Hu Jintao and Premier Wen Jiabao pledged to push forward the transformation of economic development pattern next year while maintaining a stable and comparatively fast economic growth. The Shanghai Composite index fluctuated almost eight times in and out of the boundary amid bout of profit booking and dip buying as investors awaited details from the government's annual central economic work conference.

The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, added 14.85 points, or 0.45%, to 3,331.89, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange advanced 1.2% or 166.59 points, to 14,051.525. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, gained 0.7%, to 3,668.83.

On the economic front, China’s Ministry of Finance announced on Friday that it plans to issue RMB 15 billion in discounted book-entry treasury bonds. The T-bonds, the 25th batch this year, will be sold during the period from Dec. 7 to Dec. 9.

In Hong Kong, the stock market benchmark lost with losses in materials and resources stocks after pullback in base and precious metal prices after greenback strengthened against major counterpart following signs the U.S. economy is on a steady path to recovery. Financials shares remained under pressure after the international Monetary Fund last week revealed its concern on the possible bubble in the Hong Kong property market.

At the closing bell, the Hang Seng Index stumbled 173.19 points, or 0.77%, to 22,324.96, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, fell 103.25 points, or 0.77%, to 13,358.30.

On the economic front, the Hong Kong Monetary Authority (HKMA) announced today (Monday) that the official foreign currency reserve assets of Hong Kong amounted to US$256.3 billion at the end of November 2009 (end-October 2009: US$240.1 billion)

In Australia, the stock market finished the session lower, extending losses for second consecutive day, despite a firm beginning inspired by positive close of Wall Street Friday after the US unemployment rate declined unexpectedly. The benchmark indices plunged into red terrain as a fall in commodity metal prices Friday dented materials stocks. Gold miners were hurt by sharp fall in gold prices. A weaker oil price also sent local oil stocks lower. Sell off in top four banks weighed down financials sector. At the closing bell, the benchmark S&P/ASX200 index stumbled 25.7 points, or 0.55%, to 4,676.5, meanwhile the broader All Ordinaries retracted 26 points, or 0.55%, to 4,695.2.

On the economic front, reflecting the decline in the US unemployment rate from 10.2% to 10%, jobs ads in Australia were up 5.2% in October and 12.3% higher than their 2009 lows recorded in July. Meanwhile, according to the Australian Industry Group / Housing Industry Association Performance of Construction Index, seasonally adjusted construction activity was stood at 47.6 in November, down from 50.9 in the previous month. A reading above 50 indicates expansion, while one below 50 suggests contraction.

In New Zealand, equities extend its losing session to end the first trading day of the week in the negative region. The NZX50 fell 0.25% or 7.88 points to 3138.58. The NZX 15 decreased by 0.43% or 24.16 points to close at 5680.36.

On the domestic front, house values rose 1% in the 12 months ended November 30, up from a 0.20% gain in the period through October, according to QV Valuations. The average sale price increased to $393,373 from $389,198 a month earlier. Total market activity was relatively static this year, "driven by a shortage of listings as prospective vendors decided to stay put rather than sell," said spokeswoman Glenda Whitehead. They expect that January and February will lead to further increases in activity and lead to more balanced market conditions.

In South Korea, stocks closed higher as foreign investors took comfort from Wall Street gains following the release of better-than-expected U.S. job data. The benchmark Korea Composite Stock Price Index (KOSPI) rose 7.89 points to 1,632.65, the sixth straight sessions of gains.

In Singapore, stocks market finished the session higher after hovering in a narrow range with benchmark Strait Times Index hold early gains throughout the session, inspired by positive lead from Wall Street Friday improved investors optimism for global economic growth outlook. At the closing bell, the blue chip Straits Times Index was at 2,796.98, rose 5.97 points or 0.21%.

In Taiwan, stock market in Taiwan marched towards the three week high, as investors ignored weekend local election results, with technology shares leading the gains. The benchmark Taiex share index resumed its upward momentum on Monday, by finishing the day higher by 124.73 points or 1.63% in a day, closing at 7775.64, the highest closing since 16 November 2009 when market closed the day at 7792.68. It also the highest single day gain since 16 November 2009 when market advanced by 127.05 points on the day.

In Philippines, the stock market closed lower extending a losing streak as investor's sentiment remained bearish. The mining and oil index drove higher but trading interest remained thin amid reports of continued violence on the domestic front rattled the investor's sentiments. The benchmark index PSEi lost 0.50% or 15.36 points to 3,046.63, while the All Shares index fell 0.45% or 8.63 points to 1,896.08.

In India, the key benchmark indices extended losses in late trade tracking weak European stocks and lower US index futures. The BSE Sensex closed down 118.40 points or 0.69% to 16,983.14. The Sensex rose 75.06 points at the day's high of 17,176.62 in early trade. The Sensex fell 158.12 points at the day's low of 16943.42 in late trade. The S&P CNX Nifty finished down 42.20 points or 0.83% to 5066.70.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished lower at 1265.36 while stock markets in Indonesia’s Jakarta Composite index fell 27.79 points ending the day higher at 2483.76.

In other regional market, European shares retreated on Monday, pulling back from sharp gains made in the wake of U.S. jobs data, as investors continued to sell shares in mining companies. The U.K. FTSE 100 index declined 0.6% or 33.68 points to 5,289, the German DAX index lost 0.6%or 36.69 points to 5,781 and the French CAC-40 index fell 0.5% or 18.01 points to 3,829.