Asian markets ends firm on Wall Street cues, higher commodity prices

Hang Seng, Shanghai, Sensex, Sydney edge higher while Seoul bucks the regional trend

Stock markets in Asian region finished with notable gains on Tuesday, 5 January 2010, following the positive close on Wall Street overnight, higher commodity prices and optimism about global economy prompting investors to step up buying across various sectors.

On Wall Street, stocks started off the New Year broadly higher as the major U.S. stock averages touched 52-week highs behind a spate of deals, soaring commodities and strong manufacturing data. The Dow Jones Industrial Average closed up 156 points, or 1.5%, to 10,584. The S&P 500 gained 18 points, or 1.6%, to 1133, and the Nasdaq added 39 points, or 1.7%, to 2308.

In the commodity market, crude oil traded near a 14-month high in New York as freezing weather in the U.S., the largest energy consumer, and improving global economies bolstered the outlook for fuel demand.

Crude oil for February delivery was at $81.97 a barrel, up 46 cents, in electronic trading on the New York Mercantile Exchange at 3:57 p.m. Singapore time. Yesterday, the contract rose 2.7% to $81.51 a barrel, the highest settlement since 9 October 2008.

Brent crude oil for February settlement was at $80.71 a barrel, up 59 cents, on the London-based ICE Futures Europe exchange at 3:57 p.m. Singapore time. Yesterday, the contract gained 2.8% to $80.12 a barrel, the highest settlement since 9 October 2008.

Gold rose in London, extending its biggest rally in two months, as a weaker dollar boosted the metal's appeal as an alternative investment. Gold for immediate delivery advanced as much as $6.75, or 0.6%, to $1,127.95 an ounce, the highest price since 17 December 2009. The metal traded at $1,126.53 at 9:22 a.m. London time. Gold for February delivery rose 0.8% to $1,127.30 an ounce on the New York Mercantile Exchange's Comex division.

In the currency market, the US dollar remained soft in Asian trading today as equities strengthen broadly following overnight rally in US markets. However, the Japanese yen manages to recovery strongly against dollar and European majors on speculation of large-sized buying on exporters' repatriation.

The Japanese yen strengthened against greenback and pound today on speculation Japanese exporters took advantage of its recent slide to buy their own currency. Japan's currency was quoted at 91.76 per US dollar as of the TSE close today from Monday's quote at Y92.50 per dollar in New York

The Hong Kong dollar was trading at HK$ 7.7558 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 hit a three-week high on Tuesday after firm commodity and share prices gave it a lift against a soft US dollar. Building on a sharp 1.7% jump in overnight trade - the biggest daily gain in over two months, the Aussie edged up further on Tuesday to a high of $US0.9164, before finishing local trade at $US0.9144, after closing yesterday at $US0.8978.

In Wellington trade, strong equity and commodities markets lifted the New Zealand dollar into 2010, following up on gains made last year. The kiwi closed the local trading session at US73.27c, up from US72.57c on the last day of last year. The kiwi reached a high of US73.60c, before falling back to US73.27c at 5pm.

The South Korean currency rose to the 1,140-won level against the U.S. dollar for the first time in about 15 months on Tuesday due to foreigners' appetite for risky assets. The local currency closed at 1,140.5 won to the greenback, up 1.25 percent or 14.3 won from the previous session, marking the strongest level in about 15 month. It also broke through the 1,150-won mark for the first time since Sept. 23, 2008 when the won hit 1,149 won per the dollar.

The Taiwan dollar strengthened further against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 31.8600, 0.0380 up from Monday's close of NT$32.8980.

In equities, Asian stock markets ended mostly higher, bolstered by Wall Street's upbeat start for 2010 and strong commodity prices, while technology shares advanced on optimism for chip sales this year.

In Japan, the share market closed edged higher on bolstered confidence in the global economic recovery, helped by upbeat economic news from China and US manufacturing data for December. However, most of morning gains which briefly took the benchmark Nikkei to 15-month intraday high were trimmed by export related stocks after rapidly strengthening yen against US dollar.

At the closing bell, the Nikkei 225 Stock Average index was at 10,681.83, spurted 27.04 points or 0.25% from Monday's close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange grew 3.82 points, or 0.42%, to 919.57.

On the economic front, the Bank of Japan revealed that the monetary base in the country rose 5.2% year-over-year during December, following an year-over-year rise of 3.8% in the month of November. The central bank further noted that banknotes in circulation were down an annual 0.3%, while coins in circulation fell 0.7% on year. The current account balance was up 53.6%, including a 47.4% annual increase in reserve balances.

In a separate statement, the Japan Automobile Dealers Association said auto sales increased for the fifth consecutive month in December. Domestic sales of new cars, trucks and buses increased 36.5% year-on-year in December. Automobile sales totaled 250,474 units in December, larger than 183,549 recorded in December 2008. However, for the calendar year 2009, automobile sales declined 9.1% to 2.92 million vehicles

In Mainland China, growing confidence about the global economy lifted China share market higher with broad based gains across the sector heavyweights. Commodity metal and energy related stocks led the way, helped by rising commodity prices. Brokerage firms outshine on hopes of China will launch its first stock index futures in the first quarter.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, grew 1.18%, to 3,282.18, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange fell 0.12% to 13,517.38. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, has gained 0.82%, to 3,564.06.

In Hong Kong, share spiraled up underpinned by a positive offshore lead and strong gains in financials, properties and commodity metal and oil stocks as investors confidence in the global economic recovery gaining momentum after upbeat manufacturing figures globally.

At the closing bell, the Hang Seng Index spurted 456.30 points, or 2.09%, to 22,279.58, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, surged 391.48 points, or 3.07%, to 13,142.03.

In Australia, the shares market climbed at the end of trading session with strong gains in the sectors heavyweights, bolstered by signs the global economic recovery is gaining momentum after upbeat manufacturing figures from China, India, and US. At the closing bell, the benchmark S&P/ASX200 index spurted 48 points, or 0.98%, to 4,924.30, meanwhile the broader All Ordinaries surged 49.70 points, or 1.02%, to 4,939.50.

On the economic front, Australia's Housing Industry Association said in survey outcome that new home sale in Australia rose by 0.3% in November from previous month.

In New Zealand, equities commenced the first trading day of the year 2010 on the same positive note that it ended 2009. The benchmark NZX-50 index was up 38.04 points, or 1.16%, to 3268.19. Meanwhile, the NZX 15 gained 1.30% or 77.05 points to close at 5942.09

In South Korea, shares closed lower as the strengthening local currency prompted concerns about exporters' earnings prospects. The benchmark Korea Composite Stock Price Index (KOSPI) declined 5.52 points to 1,690.62, after briefly touching the 1700-mark in early trading.

In Singapore, signs of global economic recovery after upbeat manufacturing reports from the United States, China and India bolstered Singapore share market higher on the second trading day of the year. Soaring commodities and strong global manufacturing data buoyed up manufacturing and multi industries stocks. Financials and properties grew on as signs the global economic recovery is gaining momentum. At the closing bell, the blue chip Straits Times Index was at 2,920.28, grew 25.73 points or 0.89%.

In Taiwan, stocks inched up to a new 19-month closing high as investors bought Powerchip and other chip shares on hopes of rising PC demand. Helped by a Wall Street rally the main TAIEX share index rose as much as 0.9% by midday before ending up 3.55 points, or 0.04%, at 8,211.40, the highest close since 11 June 2008.

In Philippines, stock market closed higher on the back of positive cues from other Asian markets following the gains on Wall Street overnight, which boosted investor confidence. However, investors also took cues from the inflation figures, which accelerated to an eight-month high, limiting the upside move of the composite index. The benchmark index PSEi escalated 0.78% or 23.45 points to 3,028.46, while the All Shares index mounted 0.65% or 12.36 points to 1,909.22.

In India, the key benchmark indices rose for the second straight trading day of 2010, tracking firm Asian stocks. Fears of an immediate hike in interest rates by the central bank receded following comments from government officials. The BSE 30-share Sensex was up 127.51 points or 0.73% to 17,686.24. The Sensex gained 171.05 points at the day's high of 17,729.78; in early trade it's highest since 5 May 2008. The Sensex fell 2.96 points at the day's low of 17555.77 in early trade. The S&P CNX Nifty was up 45.70 points or 0.87% at 5277.90. It hit a high of 5,285.50; it's highest since 2 May 2008.

Elsewhere, Malaysia's Kula Lumpur Composite index finished slightly higher at 1288.24 while stock markets in Indonesia's Jakarta Composite index jumped 29.86 points ending the day lower at 2605.28.

In other regional market, stocks in Europe pulled back after the strong start to the year, with Cadbury dropping after Nestlé formally took itself out of the running for the U.K. chocolate maker by buying Kraft Foods' frozen business instead. The U.K. FTSE 100 gained 0.1% or 5.58 points to 5,506, the German DAX fell 0.1% or 7 points to 6,026.67 and the French CAC 40 lost 0.1% or 5.5 points to 4008.