Asian markets end up mixed on Monday

Hang Seng, Nikkei led the losses while Sensex, Sydney edge higher

Stock markets in Asian region managed a mixed closing on Monday, 8 February 2010, as investors looking for direction amid mixed cues. Although concerns about the pace of economic recovery and debt woes in Europe were seen hurting sentiment to an extent, bargain hunting after recent sharp losses was buoying up. However the commodity companies climbed after oil and metal prices increased.

On Wall Street, the Dow staged a furious reversal and topped 10,000 at Friday’s close, overcoming an earlier triple-digit loss. The Dow Jones Industrial Average added 10 points, or 0.1%, to close at 10,012 after giving up as much as 167 points earlier in the session. The S&P 500 advanced by 3 points, or 0.3%, to 1066, as the Nasdaq closed 16 points higher, or 0.7%, at 2141 after spending much of the Friday afternoon in negative territory.

In the commodity market, crude oil rebounded from a seven-week low on speculation demand will improve as the global economy recovers from its worst recession since World War II.

Crude oil for March delivery rose as much as 95 cents, or 1.3%, to $72.14 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $71.44 at 2:40 p.m. in Singapore.

March Brent crude, the pricing benchmark for most African oil grades, rose as much as 85 cents, or 1.2%, to $70.44 a barrel on the London-based ICE Futures Europe exchange. It was at $69.90 at 2:43 p.m. Singapore time.

Gold futures recovered on some bargain hunting as the 3-month low prices allured the investors to buy the commodity. Gold for immediate delivery in London gained for a second day. The metal added 0.3% to $1,069.25 an ounce at 8:16 a.m. London time.

In the currency market, the US dollar and yen are generally firm as the week starts on soft stocks and commodities.

The Japanese yen strengthened against its major counterparts on growing concerns over the global economy after mixed US employment data and on continued worries over financial problems in Europe. Japan’s currency yen was quoted 89.28 against the greenback.

The Hong Kong dollar was trading at HK$ 7.7707 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 trades, the Australian dollar was lower against major counterparts on Monday amid lack of major economic data releases in Asia today. Market players fretted about sovereign debt problem in Europe and the health of the global economy. The Australian dollar was quoted at 0.8652 against the greenback.

In Wellington trades, the New Zealand dollar ended its domestic session down from its opening level but above a five-month low, close to US68c, it reached on Saturday. The NZ dollar was at US68.68c at 5pm from US68.94c at 8am and US69.01c at 5pm on Friday. It fell as low US68.03c during the weekend.

The South Korean won ended at 1,171.90 won to the greenback, down 2 won from Friday’s close of 1,169.90.

The Taiwan dollar weakened against the greenback. The Taiwan dollar was trading lower against the US dollar at NT$ 32.1950, 0.0110 down from Saturday’s close of NT$32.1840.

In equities, Asian markets suffered declines on uncertainty over sovereign debt in the euro zone, but bargain-buying in banks and miners limited losses in some markets.

In Japan, the share market falter again on negative terrain, with key Nikkei index closed below 10,000 line for the first time in almost two months, as investors were gripped by the uncertainty about global economy as well as earning performance of Japanese companies amid a stronger yen against major currencies.

At the closing bell, the Nikkei 225 Stock Average index was at 9,951.82, dropped 105.27 points, or 1.05%. The broader Topix of all First Section issues on the Tokyo Stock Exchange dived 8.77 points, or 0.98%, to 883.01.

In economic section, outstanding loans by Japanese banks fell 1.7% in January from a year earlier to 401.6 trillion yen, slowing further from 1.2% in December as firms remained cautious about business plans, Bank of Japan data released on Monday showed. The January drop was the lowest since September 2005, when lending fell 1.8%.

Japan saw a current account surplus of 900.8 billion yen in December, the Ministry of Finance said in a preliminary report on Monday, up 452.8 percent on year. That came following the 1.103 trillion yen surplus in November.

The trade balance showed a surplus of 631.2 billion yen after the 490.6 billion yen surplus in the previous month. Seasonally adjusted, the current account surplus was 1.100.5 trillion yen after the 1.304 trillion yen surplus a month earlier.

In Mainland China, the shares continued last week losses, with key Shanghai Composite index ended a tad lower Monday in thin dealings, as players abandoned riskier assets amid jitters over the health of the global economy, sovereign risk contagion in the euro zone, slowdown in domestic lending growth, and ahead of Lunar New Year holidays next week.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, fell 4.23 points, or 0.14%, to 2,935.17, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange recovered 30.20 points, or 0.25%, to 11,947.34. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, sank 0.07%, to 3,150.99.

In Hong Kong, worries over Europe are deepening fiscal woes and monetary tightening on the mainland weighed the key benchmark indices to a five-month low on Monday, 8 February 2010. The sell off was also fueled on unwinding carry trade amid stronger US dollar. At the closing bell, the Hang Seng Index fell 114.19 points, or 0.58%, to 19,550.89, while the Hang Seng China Enterprise, which tracks the overall performance of 43 Mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, was down 142.59 points, or 1.28%, to 10,989.19.

In Australia, the shares drifted off opening highs to end the day slightly higher, helped by bargain hunters that lift the market from three month lows reached on Friday. Commodity stocks led the rally as other sectors moved either side of the gain line. At the closing bell, the benchmark S&P/ASX200 index was up 7.30 points, or 0.16%, to 4,521.40, meanwhile the broader All Ordinaries rose 6.30 points, or 0.14%, to 4,538.80.

In New Zealand, equities faltered into the negative region again. Although the stocks started the first trading day of the week slightly in the positive terrain following marginal gains on the Wall Street overnight, the NZ equities slipped back into the red region by the close of the session. At the closing today, the NZX 50 lost 0.37% or 11.54 points to 3093.45. Meanwhile, the NZX 15 fell 0.29% or 15.93 points to close at 5576.76.

In South Korea, shares closed lower as bank and financial shares widened their losses on resurfaced concerns about the health of Kumho Asiana Group. The family owners of the cash-strapped Kumho Asiana Group agreed Monday to put up its entire stake in its affiliates as collateral to creditors as they seek to secure the group's survival in return for keeping its management rights, the group's main creditor said.

Kumho’s restructuring process has been put on hold as the family has dragged its feet in taking responsibility for mismanagement by letting a Sunday deadline pass without taking any action. The benchmark Korea Composite Stock Price Index (KOSPI) lost 14.33 points or 0.91% to 1,552.79, extending its losing streak to a second session.

In Singapore, bargain hunters had lifted the Singapore share market up in choppy trade, from three month lows reached on Friday. Gains were attributed to firmer performances from banks and blue chip shares such as SingTel and ComfortDelGro and strong leads from US stock futures and European bourses. Consumer-related shares were firmer on expectations of strong holiday spending during the China Lunar New Year. At the closing bell, the blue chip Straits Times Index was at 2,693.62, gained 10.06 points or 0.37%.

In Taiwan, stock markets started the week on a positive note by inching higher, led by AU Optronics and other LCD makers, as a fall in U.S. unemployment data raised expectations for stronger technology demand. The benchmark Taiex share index inched up on the first day of the week after ending the special trading session of Saturday lower. The benchmark index finished the day little higher by 3.01 points or 0.04% at 7215.88.

On the economic front, Taiwan’s consumer price index (CPI) rose 0.29% over the previous month in January, the rise after 11 consecutive months of decline, underscoring gradual upturn of consumption.

Wholesale price index jumped 6.68% year-on-year in January, the highest since September 2008. Wu Chao-min, section chief at the third bureau of the DGBAS, however, noted that the effect on CPI will be limited, as businessmen tend to bear the extra cost at a time when the pace of economic recovery is still unstable.

Meanwhile, the foreign exchange reserves of the Taiwan amounted to US$350.71 billion at the end of January 2010, showing an increase of US$2.51 billion from the figure recorded at the end of the previous month. According to the central bank, the main factor responsible for the increase in foreign exchange reserves in January 2010 is returns from foreign exchange reserves management.

In Philippines, the stock market extended their slide, with investors looking for direction amid mixed cues. At the final bell, the benchmark index PSEi lost 0.31% or 9.04 points to 2,846.60, while the All Shares index went up 0.05% or 0.93 points to 1,823.49.

In India, key benchmark indices logged marginal gains after swinging sharply either ways in highly volatile trade. The barometer index BSE Sensex had raced above the psychological 16,000 mark in mid-afternoon trade boosted by upbeat start from European markets. The BSE 30-share Sensex was up 19.96 points or 0.13% to 15,935.61. The S&P CNX Nifty was up 3.15 points or 0.07% to 4760.40.

On the economic front, Indian government forecast its economic growth for the fiscal year ended March 2010 at 7.2%, as against 6.7% achieved in the previous fiscal, raising fears of possibility that the government may start to unwind its fiscal stimulus in the forthcoming budget. The advance estimates of the country's gross domestic product released by the Central Statistical Organisation (CSO) today forecasts a growth of 9.9% in services and 8.9% in manufacturing, the highest among the eight broader economic activities.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly lower at 1235.22 while stock markets in Indonesia’s Jakarta Composite index gave up by 43.40 points ending the day lower at 2475.57.

In other regional market, European shares climbed on Monday, shaking off some losses from last week, as investors bought up shares in the mining sector and worries about debt in Greece, Spain and Portugal appeared to recede. On a regional level, the U.K. FTSE 100 index rose 0.8% or 38.21 points to 5,099, the German DAX index climbed 0.75% or 40.60 points to 5,475 and the French CAC-40 index advanced 1% or 35.47 points to 3,599.