Asian markets witness Tuesday twilight

Sydney, Seoul, Shanghai, Hang Seng finish lower while Sensex, Strait Times edge higher

Stock markets in Asian region tanked on Tuesday, 8 December 2009, as investors were both relieved that the United States was not about to accelerate an upturn in the global interest rate cycle, but concerned about the outlook for the world’s biggest economy and Asia's leading export market.

On Wall Street, stocks closed mixed but largely flat, after Federal Reserve Chairman Ben Bernanke indicated that the central bank expected a slow pace of economic recovery and plans to maintain low rates for an extended period. The Dow Jones Industrial Average added 1 point to close at 10,390. The S&P 500 lost 3 points, or 0.3%, at 1103, while the NASDAQ declined 5 points, or 0.2%, at 2190.

In the commodity market, crude oil fell for a fifth day as the dollar clawed higher against the euro, damping demand for commodities as an alternative investment.

Crude oil for January delivery fell as much as 40 cents, or 0.5%, to $73.53 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $73.68 a barrel at 4:13 p.m. Singapore time.

Brent crude oil for January settlement on the London-based ICE Futures Europe exchange was at $76.47 a barrel, up 4 cents, at 4:13 p.m. Singapore time. Yesterday, the contract dropped $1.09, or 1.4%, to $76.43 a barrel, the lowest settlement since 13 November 2009.

Gold rose for the first time in four days as a 5.6% decline from last week’s record price renewed buying interest in the metal. Gold for immediate delivery strengthened as much as 0.9% to $1,169.03 an ounce and traded at $1,160.89 at 1:32 p.m. in Singapore. February-delivery gold on the New York Mercantile Exchange’s Comex unit fell 0.2% to $1,161.40 an ounce.

In the currency market, the U.S. dollar traded modestly weaker against most major currency rivals in Asian trading as investors continued to mull the likelihood of a rate hike by the U.S. Federal Reserve.

The Japanese currency strengthened for second day after Bernanke’s remarks tore speculation for an early US rate increase. The yen was quoted at 88.85 against greenback from 89.51 on 7 December.

The Hong Kong dollar was trading at HK$ 7.7504 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 edged off lows on Tuesday, aided by a softer US dollar, as investors revived bets of US interest rates staying at zero for some time. At the local close, the dollar was trading at $US0.9127, from a low of $US0.9054 struck offshore, to be marginally down from $US0.9155 seen here at yesterday’s close.

In Wellington trade, the New Zealand dollar consolidated in its domestic session today after rising off lows on Monday night. The NZ dollar was US71.47c at 5pm from US71.71c at the same time yesterday. It fell as far as US70.80c on Thursday night but its recovery was helped by the Bernanke remarks.

The South Korean won closed at 1,155.10 won to the U.S dollar, down 1.8 won from Monday's close of 1,153.30.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.2330, 0.0470 up from Monday’s close of NT$32.2800.

In equities, Asian markets ended mostly lower, with Japanese stocks snapping a six-session winning streak as exporters dropped on the yen's renewed strength.

In Japan, shares market finished the session lower snapping six days of long winning streak as investors took a breather following weak cues from Wall Street after US Federal Reserve Chairman Ben Bernanke indicated that the central bank expected a slow pace of economic recovery and plans to maintain low rates for an extended period. At the closing bell, the Nikkei 225 Stock Average index was at 10,140.47, eased 27.13 points or 0.27% from its previous close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange lost 2.23 points, or 0.25%, to 896.70.

On the economic front, Japan's government unveiled 7.2 trillion yen ($80.59 billion) on economic stimulus measures, as it looks to avoid a return to recession ahead of upper house elections in mid-2010. Hatoyama’s first stimulus plan includes 3.5 trillion yen to help regions, 600 billion yen for employment and 800 billion yen on environmental initiatives, the Cabinet said today in a statement in Tokyo.

Ministry of finance said Japan Current account surplus rose 42.7% year on year to 1.39 trillion yen in October 2009 as worldwide government stimulus spending spur demand for exports.

The data from cabinet office showed that leading index rose by eighth consecutive moth to a score of 89.7 in October. At the same time, the coincident index stood at 94.3, up from 93.2 in the preceding month. Lagging index stood at 84.8, up from 83.1 in the previous month.

Japan’s M2 money stock was up 3.3% on year in November, the Bank of Japan said on Tuesday, standing at 759.3 trillion yen. That followed the revised 3.4% gain on year in October to 757.4 trillion yen.

M3 money stock was up 2.4% on year to 1,057.7 trillion yen, matching the previous month's gain. M1 money stock was up an annual 1.1% to 479.9 trillion yen after adding 1.2% on October.

In Mainland China, share market tumbled with broad based sell off across the sector, as investors were cautious about US economic prospects in 2010 after the Federal Reserve's chief warned the US economy would continue to struggle. The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, dropped 35.23 points, or 1.06%, to 3,296.66, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange decreased 0.86% or 121.23 points, to 13,930.28. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, dropped 1.22%, to 3,624.02.

On the economic front, the Chinese government announced Monday at the three-day annual Central Economic Work Conference that next year the country should coordinate efforts to maintain stable and comparatively fast economic growth and speed up the transformation of the economic development mode.

In Hong Kong, the stock market widened losses throughout the session to closed lower enduring losses for third day in row amid comments from Fed Chairman Bernanke, with financials and properties shares witnessed steep sell off on news that Dubai World is struggling to restructure debt and on persistent worries about the possible bubble in the Hong Kong property market. HSBC holding plummeted the most in Hong Kong on news debt restructuring by Dubai state-run companies may almost double to $46.7 billion, as more of the emirate’s businesses can need help making payments.

At the closing bell, the Hang Seng Index stumbled 264.44 points, or 1.18%, to 22,060.52, 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 206.20 points, or 1.54%, to 13,152.10.

In Australia, the stock market gave up morning gains to finish the session edged lower amid relatively quiet trading with benchmark All Ordinaries extended losses for third consecutive day. Financials, retailers, and healthcares stocks led the declines. Shares of banks and financials tumbled on worries higher interest rate may increase bad debts. 2.2% pullback in crude oil prices overnight triggered selling in energy stocks. At the closing bell, the benchmark S&P/ASX200 index stumbled 5.9 points, or 0.13%, to 4,670.6, meanwhile the broader All Ordinaries retracted 8.70 points, or 0.19%, to 4,686.4.

On the economic front, the statistics bureau of Australia reported today a seasonally adjusted current account deficit of A$16.183 billion in the third quarter ended September, following a revised deficit of A$13.133 billion in the June quarter.

Meanwhile, the National Australia Bank's latest monthly business survey showed business confidence rose three index points to a reading of plus 19.2 in November. Business conditions eased by 1.5 points to a reading of plus 10.3 points in November.

In New Zealand, benchmark index ended flat, however in the negative region, registering the third consecutive session in the red region. The NZX50 ended almost flat in the negative region, down 0.04% or 1.27 points to 3137.31. The NZX 15 inched up 0.11% or 6.05 points to close at 5686.41.

On the economic front, New Zealand’s total manufacturing activity, measured by seasonally adjusted sales volumes fell 1.4% in the September 2009 quarter. However, excluding meat and dairy product manufacturing, volumes rose 1.0%. At the total sales level, meat and dairy product manufacturing was the dominant industry, with a 7.1% drop in volumes in the September 2009 quarter driving the overall decline. Manufacturers of wood products and basic metals are showing signs of recovery from a slump to 15 year lows in total manufacturing activity, but it is still a mixed bag.

Also, New Zealand’s total building work fell 6% in the three months through September, extending its decline for a seventh quarter amid a slump in new construction permits. The total value of building work put in place fell to a seasonally adjusted $2.57 billion in the third quarter.

In South Korea, stocks closed lower as investors took profits following the sixth straight session of gains. The benchmark Korea Composite Stock Price Index (KOSPI) shed 4.87 points 0.3% to 1,627.78.

In Singapore, stocks market finished the session higher after trading in narrow range throughout the day, amid mixed lead from Wall Street overnight, with City Development led the rally following rating upgrade from brokerage firm. Rise in commodities metals and crude oil prices in Asian trade supported the shares of commodity related companies. Banks shares end in green as short covering emerged in late hour. At the closing bell, the blue chip Straits Times Index was at 2,805.50, rose 8.52 points or 0.3%.

In Taiwan, stock market in Taiwan finished flat as gains in tourism sector was followed by losses in the financial sector. Taiwan’s exports that touched a 13-month high represented the first positive export growth in 14 months limiting the losses of the session. The benchmark Taiex share index parted from the one month high status, by finishing the day lower by 6.93 points or 0.09% at 7768.71.

On economic front, Taiwan’s consumer price index or CPI fell 1.59% year-on-year in November after a revised fall of 1.87% in October, the tenth straight fall in the CPI. According to the Directorate General of Budget, Accounting and Statistics, on a monthly basis, the CPI fell 0.75% in November. For the first eleven months of 2009, the CPI declined by 0.92% year-on-year.

The wholesale price index or WPI increased 1.01% month-on-month, taking the annual rise to 0.84%. In October, the WPI fell a revised 6.21% annually. During the first eleven months of the year, the WPI decreased 9.92% over the same period of the previous year.

On the other hand, Taiwan’s exports jumped 19.4% year-on-year to US$20.02 billion in November, a 13-month high, also representing the first positive export growth in 14 months.

In Philippines, the disquiet created by President Gloria Macapagal-Arroyo’s declaration of martial law in Maguindanao continued to turn investors down away from the Philippines stock market. Worries over asset price inflation due to the record low interest rate also weighed down investors sentiment. At the concluding bell, the benchmark index PSEi tumbled 1.13% or 34.56 points to 3,012.07, while the All Shares index declined 1.05% or 20.08 points to 1,876.00.

In India, the key benchmark indices extended gains in late trade on rebound in European markets and higher US index futures. The BSE Sensex closed up 244.54 points or 1.44% to 17,227.68. The S&P CNX Nifty closed higher 81.25 points or 1.60% to 5147.95.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished lower at 1261.46 while stock markets in Indonesia’s Jakarta Composite index inched up 0.13 points ending the day higher at 2483.89.

In other regional market, European shares edged lower, with miners and telecoms adding pressure, as comments from the Federal Reserve's chairman raised uncertainty over the prospects for the U.S. economy. Amid these mixed messages, regional European equity markets were also showing small moves. The U.K. FTSE 100 index declined 0.1% to 5,304.17, the German DAX index gained 0.2% to 5,797 and the French CAC-40 index traded 0.1% higher at 3,845.