Monday marks an excellent start for Asian markets

Asian markets ended in a positive manner today, starting off the year on upbeat note as the investors ignored the weak Chinese economic data and instead fosued on the medium term outlook for the world economy. The official Purchasing Managers Index in China moderated for the first time in four months, an indication of cooling manufacturing activities in China due to tighter monetary policies. The PMI, a comprehensive gauge of industrial activities across the country, was at 53.9% in December from November's 55.2% percent The result was similar to the HSBC PMI reading released last Thursday, which fell to a three-month low of 54.4 in December. The markets managed to shrug this off though with the equity bourses in Australia, Tokyo, Shanghai, New Zealand and Thailand being closed for public holidays. This made it a thinly traded session and ideas that the Chinese monetary tightening efforts are working fine for the economy worked fine with the bulls who preferred to keep the year end momentum going. In US on Friday, the Dow had closed up 0.07% at 11577.51 Friday, up 11% from where it began 2010.



Meanwhile, the two-speed global economic recovery of 2010 is likely to persist in 2011, with weak growth in advanced economies barely enough to bring down unemployment and emerging markets facing the challenges of success, including how to avoid overheating and handle strong capital inflows, according to the Olivier Blanchard, IMF's Chief Economist, as per media reports. In an assessment of the global economy at the end of 2010, and the prospects for 2011, Blanchard said that countries should continue to focus on rebalancing their economies in the coming year, including structural measures and exchange rate adjustments.

In South Korea, the markets went up at an impressive pace with the local manufacturing activity accelerating in December to its fastest rate in seven months, propelled by an increase in new orders. The HSBC South Korea's Purchasing Managers' Index in December rose to a seasonally adjusted 53.9 from 50.2 in November. A reading above 50 indicates expansion while a reading below signals contraction. The Kospi index closed up 19.08 points or 0.93% on the day, closing at 2,070.08- its all time high.

In Hong Kong, stocks surged amid upbeat global cues and shares ended higher for the fourth straight session today. The moderating Chinese growth numbers did not have much of an impact and the index linked counters logged in decent gains. The benchmark Hang Seng Index added 400.60 points or 1.7%, to close at 23,436.05 points.

The Singapore, stocks rose as the economy grew at a record 14.7% in 2010 as the export-dependent country bounced back from the global downturn. The performance beat its previous best of 13.8% in 1970 and made Singapore Asia's best performing economy of the year. This pepped up the stocks right from the start and the Strait Times index gained 45.73 points to 3,235.77 on a volume of 2,168 million shares.

In India, the markets lost early gains amid late selling though the economic data was positive. The shares in metals and consumer durables space recorded decent gains. India's exports during November 2010 were valued at US $ 18895 million (Rs. 85063 crore), which was 26.5% higher in Dollar terms (22.3% higher in Rupee terms) than the level of US $ 14933 million (Rs.69537 crore) during November 2009. The Sensex closed at 20555 (provisional), up 46 points from its previous close or 0.25%.

In other markets, the Jakarta Composite in Indonesia gained 0.65%, the KLSE Composite in Malaysia added 0.96% while the Taiex in Taiwan rose 0.59%. The US dollar was broadly higher today, though the commodity prices stayed strong. The light, sweet crude oil prices were hovering at $ 91.80 per barrel when last seen, up 42 cents on the day, after testing nearly $92 earlier in the electronic session.