Asian Markets Finish Friday On Favorable Note

Nikkei, NZX 50, Sydney, Seoul, Shanghai edge higher while Sensex bucks the regional trend

Stock markets in Asian region finished firm on Friday 8 January 2010, with a positive close on Wall Street overnight lifting sentiment to some extent ahead of a critical U.S jobs report due later in the day. However, with gold, metals and crude prices extending losses on Friday due to a firmer dollar, a little bit of caution restricted big gains. Investors were cautiously optimistic on the jobs report as currency markets continued to flip-flop around amid speculation about possible rate hikes in the U.S.

Japan's Nikkei average led the gainers in the region and hit a fresh 15-month closing high, as a weaker yen boosted export-related stocks. After falling in early trades on worries about liquidity tightening, the Chinese market also bounced back in late trading.

On Wall Street, stocks edged up by Thursday's close, though the tech-heavy Nasdaq held flat, as investors remained reticent ahead of the government's December jobs report on Friday. The Dow Jones Industrial Average added 33 points, or 0.3%, at 10,607, and the S&P 500 gained 5 points, or 0.4%, at 1142. The Nasdaq declined by 1 point, or 0.1%, at 2300.

On the economic front, initial jobless claims came in at 434,000 for the week ended Jan. 2 -- 1,000 higher than the previous week. The four-week moving average fell for the 18th week in a row, signaling that the improvement trend remains intact and, at 450,240, it marked the lowest level since September 2008.

In the commodity market, crude oil fell for a second day in New York on concern investment in commodities may slow after China took steps to tighten bank lending.

Crude oil for February delivery fell as much as 50 cents, or 0.6%, to $82.16 a barrel in electronic trading on the New York Mercantile Exchange. It was at $82.70 at 4:03 p.m. in Singapore. Yesterday, the contract declined 52 cents to settle at $82.66, the first drop since 21 December 2009.

Brent crude oil for February settlement fell as much as 51 cents, or 0.6%, to $81 a barrel on the London-based ICE Futures Europe exchange. It was at $81.45 a barrel at 4 p.m. Singapore time. Yesterday, the contract fell 38 cents, or 0.5%, to $81.51.

Gold fell for a second day as the dollar’s strength sapped demand for the precious metal as an alternative asset. Gold for immediate delivery weakened 0.7 percent to $1,123.47 an ounce at 2:48 p.m. in Singapore. February-delivery futures fell 0.9% to $1,123.80 an ounce.

In the currency market, the US dollar’s rebound stalls as traders were awaiting today's non-farm payrolls report from US.

The Japanese yen pared early declined against US and European currencies after Hatoyama and Chief Cabinet Secretary Hirofumi Hirano said the government should not comment on foreign exchange. Hatoyama told today in that “as currency stability is desirable, rapid fluctuations are unwelcome.” He also said “the government, at least as far as I am concerned, basically has no need to comment on currencies.”

Japan’s currency was quoted at 93.27 per US dollar on Friday from yesterday’s quote at Y93.37 per dollar in New York. The yen also declined to 148.58 against the pound and 133.53 against the euro.

The Hong Kong dollar was trading at HK$ 7.7562 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 hovered near multi-month highs against a range of currencies on Friday helped by optimism over commodity prices and the local economy. At the local close, the dollar was trading at $US0.9135, down from yesterday's close of $US0.9209.

In Wellington trade, the New Zealand dollar consolidated today ahead of the release of US non-farm payroll data in the United States. The NZ dollar eased on Thursday night and was at US73.11c at 5pm today, little change from US73.23c at 8am and US73.78c at 5pm yesterday.

The South Korean won ended at 1,130.50 won against the greenback, up 4.90 won from Thursday's close, as offshore investors increased their holdings of the local currency.

The Taiwan dollar strengthened further against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 31.8690, 0.0060 up from Thursday’s close of NT$31.8770.

In equities, most Asian markets advanced, with Japanese exporters helped by the yen's recent weakness, while Hutchison Telecommunications' shares surged in Hong Kong on an offer to take the company private.

In Japan, the share market benchmark Nikkei index hits its highest in 15-months on the last trading day of week, bolstered by exporters and chipmakers due to weakening yen and growing global demand for high-tech products. At the closing bell, the Nikkei 225 Stock Average index was at 10,798.32, spurted 116.66 points or 1.09% from Thursday’s close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange added 9.44 points, or 1.01%, to 941.29. The Nikkei Average soared up 2.4% or 251.88 points in a week.

On the economy front, the Ministry of Finance said that Japan official reserve totaled $1.05 trillion by the end of December, down $24.32 billion from previous month. As of December 31, foreign currency reserves amounted to $996.55 billion, while reserves with the International Monetary Fund stood at $4.31 billion. Gold reserves totaled $27.16 billion, while SDR’s were worth $20.97 billion.

In Mainland China, late hour short covering following two days of heavy selling helped the mainland market to reverse morning losses to close above the gains line. Bargain hunting in banking and properties in the afternoon helped the market snap two days of steep sell off. Although gains were marginal as most of the investors stuck to the sidelines ahead of crucial US jobs data out later today.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, added 0.1%, to 3,196, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange put on 0.24% to 13,267.44. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, jumped 0.25%, to 3,480.13.

The benchmark Shanghai index tanked 2.5% or 81.14 points this week on persistent worries about tighter monetary policy measure by government to combat inflation and curb asset price speculation. Market confidences were also hurtled after the government warned state-run companies about risks of investing in stock, property, and futures markets.

In Hong Kong, share market finished the session higher after moving between the positive and negative terrain. Although gains were limited on persistent worries that Beijing will tighten further its monetary policy measure to combat inflation and curb asset price speculation. The benchmark Hang Seng Index surged 424.25 points or 1.9% this week.

At the closing bell, the Hang Seng Index bounced 27.30 points, or 0.12%, to 22,296.75, while the Hang Seng China Enterprise, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, tumbled 38.11 points, or 0.29%, to 13,035.09.

In Australia, the shares market pared back most of morning gains to finish the session higher on the last trading day of the week; with benchmark All Ordinaries registered first weekly gains of 1.2% in 2010. At the closing bell, the benchmark S&P/ASX200 index rose 12.70 points, or 0.26%, to 4,912.10, meanwhile the broader All Ordinaries gained 11.70 points, or 0.24%, to 4,942.20.

On the economic front, a survey by the Australian Industry Group and Housing Industry Association revealed the construction industry contracted in December at a slower rate than the previous month after another lift in house building activity. The index rose 1.7 points to 49.3 in December, below the 50-point level that separates growth from contraction. Reserve Bank of Australia said today that country’s December reserve asset rise to A$46.5 billion from A$45.9 billion in November. During December 2009, the value of official reserve assets increased by A$588 million, mainly due to transactions.

In New Zealand, benchmark index ends the first week of January 2010 in the positive terrain on Friday. The domestic share market remained the entire week in the green although it failed to keep up the impetus gained on the first day of 2010 gaining more than 1%. However, the weekend session saw a moderate gain of 0.77% with the benchmark index crossing 3300 mark level for the first time in more than 15 months.

The gains continued throughout the day with the NZX50 ending up more than 25 points or 0.77% to 3310.23 at the closing bell. The NZX 15 gained 1.10% or 66.12 points to close at 6036.63.

In South Korea, stocks closed higher as investors went bargain hunting after a day of massive sell-offs. The benchmark Korea Composite Stock Price Index (KOSPI) gained 11.81 points to 1,695.26.

In Singapore, the share market finished the session higher, in line with gains in other Asian markets. The firmness on the domestic bourses was inspired by gains in Asian and European stocks and positive US index futures ahead of the release of US non-farm payrolls data for December 2009 later in the global day. At the closing bell, the blue chip Straits Times Index was at 2,922.76, surged 9.51 points or 0.33%.

In Taiwan, stock markets in Taiwan retrieved some of its last session losses, led by exporters on the hopes that they could foreshadow better fourth quarter earning as Taiwan exports in December rose by 46.9%. The benchmark Taiex share index recouped some of its last session losses, by finishing the last trading day of the week higher by 43.48 points or 0.53% at 8280.90.

On the economic front, Taiwan's exports amounted to US$20.03 billion in December 2009, the highest level in 14 months. According to statistics released by the Ministry of Finance (MOF), the export amount marked a 46.9% increase year-on-year, which was also the steepest year-on-year rise since 1991. Taiwan's exports began to post negative growth in September 2008 amid a global economic recession and did not end the contraction streak until November 2009.

On the import front, Taiwan posted an impressive 56.2% annual growth in December, with the amount hitting a 15-month high of US$18.38 billion. The growth rate was the highest since 1991 and December also marked the second straight month in which imports registered a positive growth year-on-year. As a result, Taiwan enjoyed a trade surplus of US$1.65 billion last December, according to MOF statistics.

In Philippines, stock market closed the week on a negative note following the off-putting news on the economic façade. The benchmark index PSEi declined 0.01% or 0.60 pointes to 3,077.18, while the All Shares index declined 0.06% or 1.18 points to 1,937.06.

On the economic front, the Leading Economic Indicator (LEI), which monitors the economic performance slid further to negative 0.640 in the fourth quarter of 2009 from a revised negative 0.570 in the third quarter. However, the descent of the index continued to decelerate confirming earlier signs of the gradual recovery of the economy from the global crisis.

In India, key benchmark indices in India edged lower defying gains in Asian and European stocks and US index futures ahead of the release of US non-farm payrolls data for December 2009 later in the global day.

The BSE 30-share Sensex was down 75.43 points or 0.43% at 17,540.29. The Sensex fell 106.76 points at the day's low of 17,508.96 in late trade. It gained 42.40 points at the day's high of 17,658.12 in early trade. The S&P CNX Nifty was down 18.35 points or 0.35% at 5244.75.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly higher at 1292.98 while stock markets in Indonesia’s Jakarta Composite index added 27.48 points ending the day higher at 2614.37.

In other regional market, Europe stocks advanced Friday ahead of the release of key employment data on both sides of the Atlantic as investors bet that the economic recovery will continue. The U.K. FTSE 100 rose 0.3% to 5,541.28, the German DAX added 0.4% to 6,043.65 and the French CAC 40 added 0.5% to 4,045.52.