Asian Markets wrap up Wednesday lower

Sydney, Sensex, Nikkei, NZX 50 edge lower while Seoul, Shanghai step up

Stock markets in Asian region finished mostly lower on Wednesday, 30 December 2009, as lower oil and gold prices dragged down commodity producers. Profit-taking pulling down stocks in Australia and bankruptcy worries about Japan Airlines weighing on the Nikkei. The markets also followed the cues for Wall Street which ended the last session in red.

On Wall Street, stocks failed to build on a six-session winning streak Tuesday as U.S. indices closed slightly to the downside. The Dow Jones Industrial Average finished down by 1.7 points or 0.02%, at 10,545.4. The S&P 500 lost 1.6 points, or 0.1%, to close at 1126.2, and the Nasdaq was down by 2.7 points, or 0.1%, at 2288.4.

In the commodity market, crude oil rose for a sixth day before a U.S. government report that is forecast to show a decline in stockpiles of the fuel in the largest energy- consuming nation.

Crude oil for February delivery rose as much as 32 cents, or 0.4 percent, to $79.19 a barrel on the New York Mercantile Exchange. It was at $79.02 at 4:17 p.m. Singapore time. Yesterday, oil rose 10 cents to $78.87, the highest settlement since 18 November 2009.

Brent crude for February settlement rose as much as 40 cents, or 0.5 percent, to $78.04 a barrel on London’s ICE Futures Europe exchange. It was at $77.83 at 4:17 p.m. Singapore time. Yesterday, prices increased 32 cents, or 0.4 percent, to $77.64 a barrel.

Gold declined for a second day as a rebounding dollar curbed investor appetite for the precious metal as an alternative asset. Gold for immediate delivery slipped 0.4 percent to $1,092.60 an ounce at 8:34 a.m. in Singapore. Gold for February delivery in New York fell 0.4 percent to $1,093.30 an ounce.

In the currency market, US dollar staged a strong rebound overnight. Momentum in the greenback carries on in Asia as stocks are mixed on concern of bankruptcy of Japan Airlines.

The Japanese yen traded in the lower 92-yen zone Wednesday’s in Tokyo, up slightly from its levels overnight in New York on speculation the Federal Reserve will withdraw stimulus measures as the economy recovers. Japan’s currency was quoted at 92.18 yen per dollar from Tuesday’s closing quote at 92.02 yen per dollar.

The Hong Kong dollar was trading at HK$ 7.7548 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 Aussie dollar was broadly firmer on Wednesday, supported by growing optimism over commodity prices but failed to hold on to all of its gains against a rallying US dollar. At the local close, the dollar was trading at $US0.8908, up from yesterday's $US0.8881 but off a high of $US0.8993. It had spiked higher overnight after breaks of resistance levels at $US0.8884 and $US0.8911 triggered a bout of short-covering in an illiquid market.

In Wellington trade, year-end positioning drove the New Zealand dollar to a two-week high offshore before it eased back in the domestic trading session today. The kiwi peaked overnight to US72.12c but had eased to US71.50c by 5pm, still well ahead of its US70.73c level at 5pm yesterday.

The South Korean won closed at 1164.50 won to the U.S. dollar, up 6.7 won from Tuesday’s close.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.2510, 0.0390 up from Tuesday’s close of NT$32.2900.

In equities, Asian shares finished mixed, with a steep drop in shares of Japan Airlines putting pressure on the market in Tokyo and a rise in financials propping up stocks in Shanghai. Stock market in Philippines was closed for holiday.

In Japan, the shares tumbled on profit taking on the year’s last trading day as soured mood from Japan Airlines’ plunge to a record low amid fears that the company may seek bankruptcy. Japanese banks fell on speculation the companies will have to raise capital. At the closing bell, the Nikkei 225 Stock Average index was at 10,546.44, melted 91.62 points or 0.86% from Tuesday’s close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange declined 8.28 points, or 0.9%, to 907.59.

On the economy front, the Japanese government unveiled Wednesday a basic policy for its growth strategy through 2020, aiming to achieve an average economic growth of 3% in nominal terms by boosting demand in the environmental, health and tourism fields and creating a total of 4.76 million jobs in related industries.

Under the New Growth Strategy whose basic policy was approved by an extraordinary Cabinet meeting in the morning, the government will strive to lift the nation's nominal gross domestic product to around 650 trillion yen in 2020 from the expected 473 trillion yen in fiscal 2009 through next March.

In Mainland China, the share finished the session two-week closing high, helped by upbeat market expectations for the economic recovery and corporate earnings to continue next year. Financials and commodity metal and oil stocks standout today on hopes these companies will most benefit from nation’s economic growth. Window dressing efforts by institutional investors among large caps for portfolio also contributed the rally.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, spurted 50.84 points, or 1.58%, to 3,262.60, meanwhile the Shenzhen Component Index on the smaller Shenzhen Stock Exchange added 1.04% or 140.48 points, to 13,644.47. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, grew 1.66%, to 3,558.86.

On the economic front, the China Securities Depository and Clearing Corp said today that investors opened fewer accounts to trade China stocks for a fourth consecutive week. A total of 306,554 new China stock trading accounts were opened for the five days ended 25 December 2009.

In Hong Kong, share market trimmed most of morning losses to finish the second last trading session of the year edged lower. Shares of financials, properties, and major heavyweight weighed down on concern recent rallies were overdone. At the closing bell, the Hang Seng Index inched lower 2.82 points, or 0.01%, to 21,496.62, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, shed 114.16 points, or 0.9%, to 12,530.77.

In Australia, the stock market ended the last full trading day of 2009 little changed on directionless trade in sluggish volumes. Materials and resources and energy stocked witnessed selling pressure after standout performance yesterday. Gold producers fell as the price of the precious metal dropped. Banks were in mixed terrain, with losses in Commonwealth Bank of Australia and Westpac. Energy stocks were mixed, too. At closing bell, the benchmark S&P/ASX200 index slipped 11.80 points, or 0.24%, to 4,833.30, meanwhile the broader All Ordinaries melted 9.70 points, or 0.2%, to 4,847.

In New Zealand, equities dipped down slightly after resuming from the holiday weekend in the positive terrain yesterday. The benchmark index however continued to remain above the 3200-mark level for the fourth session in a row. The New Zealand share market opened in a quiet frame of mind today, slipping slightly on small volumes. At the closing bell, the NZX50 declined 0.13% or 4.22 points to 3220.91. The NZX 15 fell 0.21% or 12.10 points to close at 5860.

In South Korea, stocks finished the last session of 2009 higher as gains by memory chip makers helped offset worries over Kumho Asiana Group's debt rescheduling. Rebounding from opening losses, the benchmark Korea Composite Stock Price Index (KOSPI) gathered 10.29 points to end at 1,682.77, taking this year's total gain to 49.7%.

In Singapore, the share finished the session higher, after hovering around the boundary earlier in the day, on brightened prospects for emerging stock market strengthened typical year-end “window-dressing”. Upbeat expectations for the global economic recovery have attracted an increasing number of investors into the market today. The market breadth was strong with small and mid-cap stocks attracting fancy. Consumer related stocks gained on hopes the ongoing festive season will boost profitability. At the closing bell, the blue chip Straits Times Index was at 2,879.76.

In Taiwan, stock market retrieves his nineteen month high, headed by gains in Taiwan Semiconductor Manufacturing Company on hopes for a brighter earnings outlook in 2010 as new computers and other high-tech gadgets boost demand for chips. The benchmark Taiex share index recouped yesterday losses, attaining a new nineteen month high, by ending the day higher by 58.45 points or 0.73% at 8112.28 - the highest closing since 18 June 2008 when market finished the day at 8217.58.

In India, key benchmark indices registered modest losses as index pivotals underwent correction after four straight days of gains. Volatility was high as traders rolled over positions in the derivative segment from December 2009 series to January 2010 series ahead of the expiry of the near-month December 2009 contracts on Thursday, 31 December 2009. The BSE 30-share Sensex was down 57.74 points or 0.33% to 17,343.82. The S&P CNX Nifty was down 18.50 points or 0.36% to 5169.45.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly lower at 1271.12 while Indonesia’s Jakarta Composites finished the day at 2534.36, i.e. 15.36 points higher.

In other regional market, European stocks traded in a tight range Wednesday after setting fresh 14-month highs in the previous session, with Swiss pharmaceutical company Basilea falling sharply after a setback on a key drug. Among the main country indexes, the German DAX 30 index fell 0.1% to 6,004.58, the French CAC 40 index dipped 0.03% to 3,959.52 and the U.K.’s FTSE 100 index rose 0.1% to 5,441.15.