Strong show for Asian equities

Markets end higher on robust economic data from US and China

The Asian markets edged higher today as the risk appetite stayed firm given strong economic data from the US and an extended up move in the world commodity prices. The US stocks posted strong gains on Friday as the Commerce Department reported that the U.S. trade deficit narrowed to $38.7 billion in October, bolstering hopes of an improving economic activity as exports picked up. The consumer sentiment also surged with the Reuters and the University of Michigan consumer sentiment index for December hitting at 74.2, the highest since coming in at 76.0 in June.



The Dow added 40.26 points or 0.4% to close at 11,410.32- its one-month closing high. The Nasdaq closed at a nearly three-year high, while the S&P also managed to end at its two-year highs. The Senate continued its debate regarding the two-year tax cut extension bill totaling $861 billion initially hammered out in an agreement between President Obama and congressional Republican leaders but the deal is expected to get through and markets seem to be excited about it. China's decision to limit tightening measures to hike in reserve requirements late on Friday seemed to have not much of an effect as it was widely factored in already.

On these pointers, Asian markets started on a strong footing. The Japanese stocks surged and the exporters had a good time. The risk appetite held firm and an upbeat mood is the rest of the Asian markets helped the benchmark Nikkei 225 Index add 81.94 points or 0.80% to close at 10,294.

The Australian market also ended higher on financials and resources. Positive closing in the Wall Street spurred the index linked counters while banks led the gains following release of report aimed at increasing competition in the banking sector. The benchmark S&P/ASX200 Index rose 11.20 points or 0.24% to end at 4,757 points, coming off the highs in the late trades on some intraday profit selling.

Chinese markets roared as investors factored in a well-timed hike of 50 basis points in the bank's reserve requirements and focused on the strong set of economic data released on Saturday. November industrial value-added output rose 13.3% year on year; urban fixed asset investment increased 24.9% from a year earlier in the first 11 months while November retail sales grew 18.7% year on year. The markets continued to add up impressive gains throughout the day and the benchmark Shanghai Composite Index broke above 2900 mark to close at 2922.95, up 81.91 points or 2.90% on the day.

In Mumbai, The key benchmark indices edged higher in late trade. The markets witnessed a smart recovery as European market opened positive. Power, metal, realty and PSU stocks gained decent ground as the recent surge in the industrial output data lifted market sentiments. The benchmark BSE Sensex added 182.39 points or 0.94% to close at 19691.78 points. The output increased by 10.8% in October on automobiles and manufacturing sectors.

In other markets, South Korea's Seoul Composite added 0.53%, Hong Kong's Hang Seng gained 0.67% while Taiwan's Taiex rose 0.20%. US dollar was mixed though a bearish bias prevailed. Light sweet crude oil futures for January delivery is trading at $88.59 a barrel in electronic trading, up 80 cents per barrel from previous close while gold and copper have also rallied impressively.