Asian Markets wrap up Wednesday mixed

Shanghai, Seoul, Taiex, Hang Seng ends lower while Sensex, Strait Times finish higher

Stock markets in Asian region continued to exhibit the mixed trend on Wednesday, 16 December 2009, as investors turns more cautious as they choose to for the outcome of the two-day U.S. Federal Reserve meet. Though stocks rebounded in some parts of the region after trading lower, the undertone remains somewhat cautious.

On Wall Street, stocks finished lower as investors absorbed data showing wholesale inflation and the manufacturing picture muddled. The Dow Jones Industrial Average fell by 49 points, or 0.5%, to 10,452 and the S&P 500 went lower by 6 points, or 0.6%, to 1108. The Nasdaq declined by 11 points, or 0.5%, closing at 2201.

In the commodity market, crude oil rose for a second day before a report forecast to show that U.S. crude inventories declined last week.

Crude oil for January delivery gained as much as 59 cents, or 0.8 percent, to $71.28 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.14 at 9:02 a.m. London time.

Brent crude oil for January settlement was at $72.64 a barrel on the London-based ICE Futures Europe exchange, up 59 cents, at 8:58 a.m. London time. Yesterday, the contract rose 16 cents to settle at $72.05 a barrel.

Gold gained in Asia, paring earlier losses, as the dollar's rally paused amid investor concern inflation may accelerate, boosting interest in the metal as a store of value. Gold for immediate delivery gained 0.2% to $1,127.13 an ounce by 3:17 p.m. in Singapore, after falling as much as 0.3% earlier. February-delivery bullion on the Comex division of the New York Mercantile Exchange was up 0.4% at $1,127 an ounce.

In the currency market, US dollar remained firm across the board as market awaits FOMC statements today. The stronger-than-expected employment report in November triggered speculations that the Fed will hike its policy rate earlier than previously anticipated, which led to a fight back in the dollar.

The Japanese yen softened against the major currencies today. Japan's currency was quoted at 89.48 yen per dollar, up from Tuesday's quote of 89.12 yen

The Hong Kong dollar was trading at HK$ 7.7538 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 stumbled after the Reserve Bank said local interest rates might not need to rise as far as earlier thought because of rising loan rates. Striking an unexpectedly dovish note, the Reserve Bank of Australia's Deputy Governor Ric Battellino today said overall monetary policy stance was back in the normal range as interest rates in the economy have outpaced rises in the official cash rate.

The dollar tumbled to $US0.8987 at the local close, breaking a support level at $US0.9000 where option barriers were also seen. It had traded at $US0.9125 here at yesterday's close.

In Wellington trade, the NZ dollar gained against the Australian dollar today after Reserve Bank of Australia (RBA) deputy governor Ric Battellino said the overall stance of Australian monetary policy was back in a normal range. The NZ dollar went for a ride lower as well to US71.76c at 5pm from US72.64c yesterday.

The South Korean won closed at 1,164.9 won to the greenback, down 3.4 won from Tuesday's close, as falls in U.S. stock markets and uncertainty about the U.S. Fed's rate decision increased demand for safer assets.

The Taiwan dollar weakened against the greenback. The Taiwan dollar was trading lower against the US dollar at NT$ 32.3280, 0.04700 down from Tuesday's close of NT$32.2810.

In equities, Asian shares were mostly lower after negative cues from Wall Street and due to some caution ahead of the Federal Reserve's meeting outcome, but banks in Japan surged on the prospect of a more relaxed timetable for the introduction of stricter capital requirements.

In Japan, shares market surged with strong lead from banks and financials after news report that tougher new capital-adequacy rules for banks might be delayed by at least ten years. Buy orders flooded mega banks from the outset on hopes that anticipated tougher capital adequacy rules won't be implemented any time soon. Shares of real estate issues soared on speculation lending capacity will expand on the banking sector's improvement. Weakness in the yen against greenback overnight also helped support the electronics and automakers.

At the closing bell, the Nikkei 225 Stock Average index was at 10,177.41, soared up 93.93 points or 0.93% from its previous close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange surged 13.66 points, or 1.54%, to 898.29.

On the economic front, the ministry of Economy, Trade & Industry reported that the tertiary activity index rose a seasonally adjusted 0.5% month-on-month in October, reversing the downwardly revised 0.6% decrease in the previous month. On a yearly basis, the tertiary industry activity index slid 4.3% in October, slower than the 4.7% decrease in the preceding month.

In Mainland China, share market finished the session lower, weighed down on worries about liquidity tightening due to a slew of heavy new share supplies. Banks and financials declined after regulatory official said bad loans pose a long-term risk and the prospects of China cooling its lending binge. Properties shares were remain under pressure amid persistent fears that China's measures to cool its red-hot real estate market. Beijing said Tuesday it would boost the supply of affordable public housing and redevelop slum areas to rein in an overly rapid increase in property prices in some cities.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, slid 19.25 points, or 0.59%, to 3,255.21, meanwhile the Shenzhen Component Index on the smaller Shenzhen Stock Exchange dropped 1.16% or 160.87 points, to 13,664.97. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, slumped 0.63%, to 3,560.72.

In Hong Kong, the benchmark index stumbled with steep losses across the board, on tracking weak cues from Wall Street overnight and mainland market. Financials and properties shares suffered huge sell orders amid persistent fears that China's measures to cool its red-hot real estate market and as China Banking Regulatory Commission said bad loans pose a long-term risk. Energy shares were lower amid lingering worries over the economy and the immediate future of energy demand. Materials and industrials shrank as metal prices closed mixed yesterday in London.

At the closing bell, the Hang Seng Index stumbled 202.18 points, or 0.93%, to 21,611.74, 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 175.56 points, or 1.36%, to 12,691.43.

In Australia, the market finished the session modestly lower, after GDP figures showing economic growth were softer than expected in the third quarter, despite a bright start to the day that saw the market above the line at lunch. Banking stocks finished the day mostly lower, led by Westpac. Mining and industrial stocks weighed the most following consistent declines from the heavyweights. Gold miners slipped after the price of precious metal fell once again.

At the closing bell, the benchmark S&P/ASX200 index slipped 11.6 points, or 0.25%, to 4,661.9, meanwhile the broader All Ordinaries dropped 11.70 points, or 0.25%, to 4,676.1.

On the economic front, the Australian Bureau of Statistics said today that real gross GDP rose seasonally adjusted 0.2% in the September quarter. For non-farming GDP grew 0.3%, while terms of trade rose 1% and real gross domestic income increased 0.4%. Meanwhile, the Westpac-Melbourne Institute leading index of economic activity showed a 6.7% annualised growth rate in October.

In New Zealand, benchmark index ended in the positive region for the second consecutive session. The NZX50 increased 0.48% or 15.19 points to 3132.30. The NZX 15 advanced 0.49% or 27.99 points to close at 5701.31.

In South Korea, stocks closed lower as investors took a breather ahead of a key rate decision from the U.S. Federal Reserve. The benchmark Korea Composite Stock Price Index (KOSPI) inched down 1.61 points to 1,664.24, snapping a five-day winning streak.

In Singapore, the share market defied the weakness on the Wall Street with a rise, with positive performance in commodities producers and financials. Palm oil producers climbed after the crude palm oil for February delivery added 2.2% in Kuala Lumpur today. Properties stocks declined on tracking Chinese peers which fell as the prospects of China cooling its lending binge. At the closing bell, the blue chip Straits Times Index was at 2,813.93.

In Taiwan, stock market resumed its losing streak as technology shares tracking losses on Wall Street as concerns over inflation and technology demand spread. The benchmark Taiex share index broadened losses for the second session on Wednesday, by finishing the day lower by 56.02 points or 0.72% at 7751.60 breaching the 7800 level.

In Philippines, the stock market closed lower, despite the expectations that the central bank is likely to keep its policy rates lower when it meets tomorrow with inflation unlikely to be a problem in the short term. Investors became cautious amid a worsening economic landscape following the disappointing full-year outlook for the Philippines given by ADB. All the sectors failed to record any gain except for the property and industrial index, which limited the losses registered by the composite index. At the final bell, the benchmark index PSEi lost 0.46% or 14.20 points to 3,032.37, while the All Shares index tumbled 0.15% or 2.86 points to 1,893.64.

In India, the key benchmark indices surged in a highly volatile trade as European stocks and US index futures rose. Heavy bidding by foreign funds to the initial public offer of print media firm DB Corp also underpinned sentiment. The BSE Sensex was up 35.61 points or 0.21% to 16912.77. The S&P CNX Nifty was up 9 points or 0.18% to 5,042.05.

Elsewhere, Malaysia's Kula Lumpur Composite index finished slightly lower at 1269.03 while stock markets in Indonesia's Jakarta Composite index inched up 27.81 points ending the day higher at 2522.54.

In other regional market, British builders rallied in a faintly higher Europe stock market, as a broker's belief that a double-digit recession won't materialize drove up the sector. Of the major benchmarks in Europe, the U.K. FTSE 100 rose 0.8% or 40.72 points to 5,326, the German DAX added 1.4% or 79.36 points to 5,890 and the French CAC 40 rose 1.1% or 41.59 points to 3,876.