Asian markets mostly up on Monday

Ireland to accept financial rescue package, Chinese inflation control measures continue to keep worries afloat though

Asian markets mostly ended mostly on a strong note as the investors eyed reports that Ireland has capitulated to international demands to accept financial rescue package. After an emergency Cabinet meeting in Dublin, the country has formally asked for a rescue package from the European Union and the International Monetary Fund. Though this was very much on the cards, it still represented a U-turn by Ireland, which insisted last week that it needed no bailout. The Asian equities started on an upbeat tone following this news and were aided by firm commodity prices in the early trades on Monday morning. However, the sentiments seemed to have turned around as the day proceeded and investors were seen taking some profits as the enthusiasm spilled by Irish bailout hopes waned by the latest round of monetary tightening in China. In US, Stocks eked out steady gains on Friday, as traders remained optimistic about the likelihood of Ireland accepting bailout funds from the European Union and the International Monetary Fund. The Dow added 22.10 points or 0.2 percent to close at 11,203.33.



The Japanese stocks edged higher as the steady risk appetite and a slightly bearish undertone in the Japanese Yen helped the markets end in positive territory. The benchmark Nikkei 225 index hit a fresh 5-month high as index linked counters gains on optimism that Ireland will be helped from the recent crisis and the global economy would witness a continued recovery. Samsung Electronics, Toyota Motor Corp and Mitsubishi Corp were the leading gainers. The benchmark Nikkei 225 Index rallied by 92.80 points, or 0.93% to close at 10,115.19. On the economic front, a report released by the Japan Chain Stores Association revealed that supermarket sales in the country dropped 0.3% on an annual basis in October, the same rate of decline witnessed in September. The data further noted that sales before stores adjustment were down 2.5% in October, following a 2.7% fall in the prior month.

In Australia, the market closed in green as resources gained amid positive global cues and the railway freight transporter QR National's public float. Nothing much was present on the economic calendar to shape up the local sentiments. Treasurer Wayne Swan reportedly stated yesterday that Australian government will implement reform that is lasting and effective to give households a fighting chance in the banking system, Treasurer Wayne Swan said in his weekly economic note on Sunday. The markets rose in the first half, rallying amid firm global advices but slid lower in the closing hours. The benchmark S&P/ASX200 Index added 14.30 points, or 0.31% to close at 4,643 points.

In China, the markets defied the enthusiasm witnessed in the early Asian trades as global investors eyed the much talked about Ireland bailout. China's benchmark stock index fell for the first time in three days as banks declined after policy makers boosted the amount of money that lenders must set aside, overshadowing gains for consumer staple producers. China's stocks closed lower as the benchmark Shanghai Composite Index went down 0.15%, or 4.20 points to close at 2,884.37. The Shenzhen Component Index closed up 0.06 %, or 7.7 points, to end at 12,303.55.

China's State Council announced several measures to curb rising inflation, according to media reports. The local authorities are required to increase agricultural production and bring down their cost. The Cabinet has demanded local departments to step up vegetable-planting efforts and to reduce delivery costs. Further, road tolls for vehicles transporting fresh- and live-farm produce will be forbidden from December 1.

Other measures taken in the Cabinet meeting include reduction in prices of power, disbursal of subsidies to needy people and increase in allowances for poor students and student canteens. Local governments are instructed to adjust prices quickly and to impose temporary price controls on daily necessities.

Last week, the central bank had raised commercial banks' reserve requirement ratio by 50 points for the second time this month. In October, it had hiked interest rates by a quarter percentage point - the first such tightening move in nearly three years.

In the fast-growing Chinese economy, inflation accelerated to a 25-month high in October. Driven by higher food prices, consumer prices rose 4.4% from last year. According to the State Information Center, inflation will rise to 3.8% in the fourth quarter.

In Mumbai, the key benchmark indices bounced back from two-month lows as investors embraced risk, buoyed by news that the European Union and the International Monetary Fund are prepared to provide aid for debt-laden Ireland following the country's formal request for assistance. The strong buying momentum helped the 50-unit S&P CNX Nifty regain the psychological 6,000 mark. All the sectoral indices on the BSE were in positive zone. Banking, consumer durables and IT stocks led the rally. Capital goods and healthcare stocks lagged the rally. As per provisional closing, the BSE 30-share Sensex added 371.12 points or 1.89% to close at 19,956.56. The S&P CNX Nifty was up 119.70 points or 2.03% at 6,010, as per provisional closing.

In other markets, the Hang Seng index in Hong Kong dropped 0.81% as investors continued to eye government measures to cool the territory's booming property market. Straits Times index in Singapore dropped 0.20% while TSEX index in Taiwan added 0.83%. US dollar fell in the initial trades but cut losses as investors eyed at the state of the world economy post the Irish bailout and waited for the details of the rescue package for the European economy. In commodities, crude broke above $82 a barrel and currently quotes at $82.72, up 74 cents on the day.