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Chinese Shares Lead Asian Markets Higher

Chinese Shares Lead Asian Markets Higher
12/14/2012 4:20 AM ET

Asian stocks ended mostly higher on Friday after data showed further signs of improvement in the world's second-largest economy. Continued hopes that the Bank of Japan will pursue aggressive monetary easing after Sunday's Lower House Election and some positive news from Europe concerning the approval of the next tranche of loans to Greece and the political agreement on a Eurozone banking union also helped investors shrug off worries over the progress of U.S. budget talks.

The Japanese yen slipped to a nine-month low against the dollar and extended losses versus other major currencies after the Tankan survey indicated a sharp drop in Japanese business confidence.

Japanese shares eased marginally, as profit taking in heavily weighted shares offset gains in export-oriented companies triggered by the yen's slide on hopes for more BOJ easing. The Nikkei average slipped 0.05 percent, while the broader Topix index edged up 0.2 percent. Heavyweights Fast Retailing and Softbank fell 1.4 percent and 2.8 percent, respectively on profit taking following sharp gains in the past month, while developer Sumitomo Real Estate & Development and retail lender Credit Saison dropped about a percent each.

Among the prominent gainers, Suzuki Motor and Daikin Industries rose 2-3 percent, utility Kansai Electric Power jumped 3.6 percent and Sharp soared 7.6 percent, extending recent sharp gains on optimism over its business and financial prospects. In economic news, the closely watched Tankan survey of large manufacturers showed that Japanese manufacturers are more pessimistic than expected since March 2010. The quarterly index fell to minus 12 in December from minus 3 in September, the Bank of Japan said.

China's Shanghai Composite index soared 4.3 percent on hopes new policies will emerge from the upcoming central economic work conference on Saturday and Sunday. Hong Kong's Hang Seng index rose 0.7 percent to its highest level in over 16 months, helped by further signs of growth in mainland China. The nation's HSBC flash purchasing managers' index improved to 50.9 in December, a 14-month high and the fifth straight monthly gain, helped by improvement in areas such as new orders and employment.

Australian shares ended marginally higher near 17-month highs, with ongoing worries about the so-called fiscal cliff talks in Washington capping the upside. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index edged up about 0.1 percent each, led by miners and defensive stocks. Retailer Westfield Group rose 0.4 percent and Wesfarmers inched up 0.2 percent.

Global miners BHP and Rio Tinto rose less than half a percent each, while smaller rival Fortescue Metals Group advanced 1.4 percent, lifted by high iron ore prices and upbeat Chinese data. Among the banks, Westpac and ANZ ended narrowly mixed, while Commonwealth added 0.6 percent. APN News & Media slumped around 16 percent after the media company lowered its earnings guidance. Fairfax Media shares tumbled 5.6 percent.

South Korea's Kospi average fell 0.4 percent from a three-month high, weighed down by worries over the stalled U.S. fiscal cliff talks. Shares of LG Display fell nearly 4 percent, extending the previous session's loss, amid speculation the company might report dismal earnings next year.

New Zealand shares ended modestly higher despite weak overnight cues from the U.S. and European markets. The benchmark NZX-50 index rose 0.1 percent. Heavyweight Telecom rose 0.9 percent, Auckland International Airport, the country's major gateway, gained about 2 percent and rural services firm PGG Wrightson added 2.7 percent.

Goodman Fielder and NZ Refining fell about 5 percent each ahead of their exit from the NZX 50 Index on December 24. Shares of telecommunications network operator Chorus retreated 1.5 percent, extending losses on concerns about price regulation. Fletcher Building, the nation's largest construction company, eased 0.4 percent.

Elsewhere, India's benchmark Sensex was moving up 0.1 percent after data showed inflation unexpectedly eased in November, raising hopes the Reserve Bank of India will cut rates starting January. Singapore's Straits Times was moving up 0.3 percent, while the markets in Malaysia, Indonesia and Taiwan were down between 0.1 percent and 0.8 percent.

On Wall Street, stocks came under selling pressure overnight, as lingering concerns about the looming fiscal cliff overshadowed a batch of largely upbeat economic data on retail sales and jobless claims. Separate reports showed that weekly jobless fell sharply to a near four-year low last week, while retail sales rose 0.3 percent in November from the previous month, erasing the previous month's decline. The Dow and the S&P 500 dropped about 0.6 percent each, while the tech-heavy Nasdaq shed 0.7 percent.

by RTT Staff Writer

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