Asian markets edge higher

Nikkei, NZX 50 inch higher while Shanghai, Seoul falls

Stock markets in Asian region extended their winning streak on Wednesday, 6 January 2010, as investors started selective buying as US sales reports boosted expectations demand in the world's biggest economy is recovering.

On Wall Street, stocks finished mixed but flat Tuesday, bouncing back from session lows after a report said pending home sales tumbled in November. The Dow Jones Industrial Average slipped 12 points, or 0.2%, to 10,572. The S&P 500 added 4 points, or 0.3%, at 1137, as the Nasdaq gained less than a point at 2309.

On the economic front there was mixed batch of economic releases. November factory orders rose 1.1% while pending home sales fell 16%. The first decline in nine months came as buyers rushed to close deals before the initial expiration date of a government tax-credit program. Year over year, pending home sales have risen 15.5%.

In the commodity market, crude oil traded near a 14-month high in New York as an industry report showed a decline in U.S. crude stockpiles and cold weather bolstered the outlook for fuel demand in the world’s largest energy-consuming nation.

Crude oil for February delivery was at $81.59 a barrel, down 18 cents, in electronic trading on the New York Mercantile Exchange at 3:40 p.m. Singapore time. Yesterday, the contract rose 26 cents to $81.77, the highest settlement since 9 October 2008.

Brent crude oil for February settlement traded at $80.42 a barrel, down 17 cents, on the London-based ICE Futures Europe exchange at 3:40 p.m. in Singapore. Yesterday, the contract rose 47 cents, or 0.6%, to end the session at $80.59.

Gold advanced in London as last month’s decline, the steepest in more than a year, spurred demand from investors. Platinum rose to the highest price since August 2008. Gold for immediate delivery rose as much as 0.7% to $1,126.13 an ounce and traded at $1,126.05 by 8:49 a.m. in London. Gold futures for delivery in February on the Comex division of the New York Mercantile Exchange gained 0.7% to $1,126.10.

In the currency market, the US dollar recovered overnight as rally in crude oil stalled ahead of $82 while gold retreats ahead of $1130 level. The greenback is regathering some strength in early European session as gold’s recovery lost steam and is back pressing $1120 level. The yen weakened against major currencies amid reports Japanese Finance Minister Hirohisa Fujii wants to step down due to ill health.

The Japanese yen softened against major currencies on speculation gains in Asian stocks will spur demand for riskier investments. Japan’s currency was quoted at 91.98 per US dollar from Tuesday’s quote at Y91.54 per dollar in New York.

The Hong Kong dollar was trading at HK$ 7.7554 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 was slightly lower against major counterparts on Wednesday’s after a muted reaction to a government report showed home-building approvals rose in November at a faster pace than economists estimated and the release of disappointing US home sales data overnight. The Australian dollar was quoted at 91.20 US cents from yesterday’s quote of 91.43 US cents.

In Wellington trade, the New Zealand dollar traded overnight in a range between US73.20c and US73.90c against the greenback, which was pressured by a steep drop in United States pending home sales. Around 8am the kiwi was buying US73.36c, little changed from its level at 5pm yesterday.

The South Korean won finished the day at 1136.4 won up from yesterday’s 1140.5 won.

The Taiwan dollar strengthened further against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 31.8270, 0.0330 up from Tuesday’s close of NT$31.8600.

In equities, Asian stocks ended mostly higher, with Japanese shares advancing for a third straight session as exporters were boosted by weakness in the yen

In Japan, the share market continued rally for third consecutive day, with benchmark Nikkei Average hugs 15-month high in wobbly trade, thanks to positive commodities prices and softer yen, although overall gains were limited due a disappointing showing in US home sales.

At the closing bell, the Nikkei 225 Stock Average index was at 10,731.45, spurted 49.62 points or 0.46% from Tuesday’s close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange added 11.56 points, or 1.26%, to 931.13.

In Mainland China, the China stocks gave up morning gains to finish the session lower, with falls in financials on worries about declining mortgages demand as government plan to crackdown on property speculation. Developers were under pressure on persistent worries the China will step up more measures to curb property speculation and due to inflationary pressure.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, grew 0.85%, to 3,282.18, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange slid 0.1% to 13,505.18. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, lost 0.63%, to 3,541.73.

On the economic front, a monthly survey released indicated improvement in China's services sector, with December business activity rising at the fastest pace in three months. HSBC said its China Services Purchasing Manager's Index rose to 57.2 for the month, up from 57.1 in November 2009.

In Australia, the shares market gave back morning gains to finish the session reasonably flat. The initial sharp gains which briefly took the key All Ordinaries to a 15-month intraday high were erased by profit taking in retailers, properties, and financials stocks. Investors stepped back and reassess their position after a mixed reaction to US data. At the closing bell, the benchmark S&P/ASX200 index slipped 2.9 points, or 0.06%, to 4,921.40, meanwhile the broader All Ordinaries added 7.30 points, or 0.15%, to 4,946.80.

On the economic front, the Australian Bureau of Statistics said Australian building approvals rose 5.9% to 13,724 units in November, seasonally adjusted, from an upwardly revised 12,962 units in October. In the year to November, domestic building approvals were up 33.3%. But Australia’s services sector failed to register growth in December; the Australian Industry Group says that is a reflection of the three consecutive official interest rate rises at the end of last year.

In New Zealand, benchmark index continued its upward movement although the impetus was milder than it’s opening on the first trading day of the year 2010 yesterday. New Zealand’s benchmark index gained the highest in over a month by more than 1% on Tuesday, beginning the New Year on a highly optimistic note. The benchmark NZX-50 index inched up 0.10% or 3.39 points to 3271.57. The NZX 15 gained 0.09% or 5.41 points to close at 5947.50.

In South Korea, stocks rose to a three-month high as foreign investors scooped up tech and auto shares, shrugging off the local currency's ascent. The benchmark Korea Composite Stock Price Index (KOSPI) advanced 14.7 points, or 0.87%, to 1,705.32.

In Singapore, sign of global economic recovery and positive offshore lead buoyed up Singapore share market 0.4% higher at the end of trading, with benchmark Strait Times registered gains for third day in row. At the closing bell, the blue chip Straits Times Index was at 2,930.49 grew 10.21 points or 0.35%.

In Taiwan, stock market in Taiwan extended its winning streak on Wednesday, 6 January 2010, crawling towards the twenty month high, led by LCD maker and other DRAM issues, as investors bought into the companies with brighter earnings outlook for 2010. The benchmark Taiex share index neared a new twenty month high, by ending the day higher by 116.22 points or 1.42% at 8327.62 - the highest closing since 11 June 2008 when market finished the day at 8345.59.

On the economic front, Taiwan’s consumer prices fell for an eleventh consecutive month in December on cheaper food, electronics and clothing prices. According to the data released by the Directorate General of Budget, Accounting and Statistics, the December consumer price index fell 0.21% from a year earlier, compared with a seasonally adjusted 1.61% in November. On a monthly basis, the December CPI fell 0.45% from November on lower fruit and vegetable costs and also reductions in consumer electronics prices, it said.

In Philippines, stock market closed marginally higher on the back positive signal from the central bank, which said that it would possibly keep its rates unchanged until later this year, which helped to boost investors’ sentiment. Despite increasing domestic prices, the average annual inflation rate of 3.2% for 2009 was still within the central bank’s official target of 2.5% to 4.5%. However, losses in mining & oil index, which tumbled more than 3%, limited the gains of the composite index. At the concluding bell, the benchmark index PSEi ascended 0.37% or 11.47 points to 3,039.93, while the All Shares index escalated 0.31% or 6.09 points to 1,915.31.

In India, the key benchmark ended slightly higher after moving in narrow ranges during the day. Firm Asian stocks and expectations of strong Q3 December 2009 results, supported domestic bourses. European stocks were weak. IT and metal stocks fell. But FMCG, healthcare and realty stocks rose. The market breadth was marginally positive.

The BSE 30-share Sensex was up 14.89 points or 0.08% at 17,701.13. The Sensex gained 104.09 points at the day's high of 17,790.33 at the onset of the trading session, its highest since 28 February 2008. The S&P CNX Nifty was up 3.90 points or 0.07% at 5281.80. It hit a high of 5310.85 in early trade, its highest since 27 February 2008.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly higher at 1293.17 while stock markets in Indonesia’s Jakarta Composite index fell 1.98 points ending the day lower at 2603.30.

In other regional market, stocks in Europe couldn't hold early gains on Wednesday as the market continued to drift after the year-opening rally. By region, the U.K. FTSE 100 slipped 0.3% or 15.80 points to 5,507, the German DAX fell 0.4% or 21.73 points to 6,010 and the French CAC 40 fell 0.2% or 8.30 points to 4,005.