Asian Market Commentary
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Asian Markets In Positive Territory Amid Cautious Trades

Asian stock markets are trading in positive territory on Friday with investors indulging in some selective buying. However, the mood is somewhat cautious in most of the markets in the region following a weak lead from Wall Street where stocks mostly ended flat overnight amid worries about the fiscal cliff.

The Australian stock market is trading firm with investors picking up stocks from across various sectors.

Energy, mining, healthcare and industrial stocks are among the notable gainers. Financial and consumer discretionary stocks are also trading firm.

The benchmark S&P/ASX 200 index, which advanced to 4,688.8, is currently up 30.5 points or 0.7 percent at 4,678.5. The broader All Ordinaries index is up 29.5 points or 0.6 percent at 4,690.9, off the day's high of 4,701.

Among top miners, BHP Billiton (BHP, BBL) is up 1.2 percent, Rio Tinto (RIO, RIO.L) is adding 1.8 percent, Fortescue Metals is up with a gain of 2.2 percent and Newcrest Mining is gaining about 1.5 percent.

Among energy stocks, Woodside Petroleum, Santos, Oil Search, Origin Energy and Caltex Australia are up 0.7 to 1.3 percent.

Key bank stocks ANZ Bank, Westpac (WBK), National Australia Bank and Commonwealth Bank of Australia are trading higher by 0.5 to 0.8 percent. Bendigo & Adelaide Bank is up nearly a percent and Bank of Queensland is trading 0.5 percent up.

PanAust, Iluka Resources and Atlas Iron are trading higher by 3 to 4 percent. Harvey Norman Holdings, APA Group, Sydney Airport, Bluescope Steel and Oz Minerals are up 2 to 2.8 percent.

Perseus Mining, Ramsay Healthcare, Orica, Downer EDI, Lend Lease Group, Computershare, Cochlear, CSL, Arrium and Transurban Group are also trading notably higher.

In the currency market, the Australian dollar opened higher and was quoting at US$1.0377 in early trades, up from Thursday's close of US$1.0357.

The Japanese stock market opened on a firm note, extending recent gains, with weak economic data triggering hopes of some monetary easing from the central bank. The yen's continued slide against the U.S. dollar too contributed to the buoyant start.

The benchmark Nikkei 225 index, which rose to 10,421, was up 80 points or 0.8 percent at 10,403 at the end of the morning session.

Shares from automobile, manufacturing, pulp & paper, rubber, marine transport and foods sections were mostly up with strong gains. Electric power, construction and real estate saw some profit taking after recent gains.

Tokuyama Corp. moved up by over 7 percent. Ube Industries, Mazda Motor, Hino Motors, Mitsubishi Motors, Suzuki Motor, Yokohama Rubber, Fujifilm Holdings, Dai Nippon Printing, Nikon Corp., Taiyo Yuden, Furukawa and Sharp Corp. gained 2.5 to 6 percent.

Toshiba Corp. moved up nearly 4 percent following an announcement from the company that it is in talks to sell a stake in its Westinghouse Electric atomic-power unit.

Oki Electric Industry, GS Yuasa, Kawasaki Heavy Industries, Trend Micro, Fast Retailing, Fuji Heavy Industries, Honda Motor (HMC), Toyota Motor (TM), Fuji Heavy Industries and Sumitomo Heavy Industries also rose sharply.

Among the losers, Tokyo Electric Power declined more than 6 percent, Kansai Electric Power eased 4.8 percent and Nippon Electric Glass was down by over 3 percent. Shinsei Bank, Tokyo Tatemono, Sumco Corp. and Taiheiyo Cement also declined sharply.

According to data released by the Ministry of Economy, Trade and Industry, industrial output in Japan fell a seasonally adjusted 1.7 percent on month in November, well below forecasts for a decline of 0.5 percent following the 1.6 percent increase in October.

On a yearly basis, industrial production dropped 5.8 percent - also missing forecasts for a fall of 4.6 percent after losing 4.5 percent in the previous month.

Another report from the same ministry said retail sales in Japan were up 1.3 percent on year in November, standing at 11.086 trillion yen. That beat forecasts for a gain of 1.1 percent following the 1.2 percent contraction in October.

Sales from large retailers were up 0.9 percent on year to 1.664 trillion yen - well above expectations for a contraction of 0.4 percent after plunging 3.2 percent in the previous month.

According to data released by the Ministry of Internal Affairs and Communications, core consumer prices in Japan were down 0.1 percent on an annual basis in November - matching forecasts following the flat reading in October.

Overall nationwide consumer prices were down 0.2 percent on year, also in line with forecasts following the 0.4 percent decline in the previous month. On a monthly basis, core CPI was down 0.3 percent and overall inflation dipped 0.4 percent.

Core consumer prices for the Tokyo region - considered a leading indicator for the nationwide trend - were down 0.5 percent on year in December. That matched forecasts and was unchanged from November.

Average household spending in Japan was up 0.2 percent on year in November at 273,772 yen, another report from the Ministry of Internal Affairs and Communications said. That was well shy of forecasts for an increase of 0.7 percent following the 0.1 percent contraction in October.

The ministry also said that the unemployment rate in Japan was a seasonally adjusted 4.1 percent in November, beating forecasts for 4.2 percent, which would have been unchanged from the previous month.

In the currency market, the U.S. dollar traded in the mid-86 yen range in early deals in Tokyo. The yen is currently trading at 86.40 to the dollar.

Among other markets in the Asia-Pacific region, Indonesia, Hong Kong, Malaysia, New Zealand, South Korea and Taiwan are up with modest gains, while Shanghai and Singapore are up marginally.

On Wall Street, stocks ended roughly flat on Thursday despite staging a sharp rally from lower levels.

The major averages briefly peeked into positive territory in the final hour of trading but finished the session in the red. The Dow edged down 18.3 points or 0.1 percent to 13,096.3, the Nasdaq ended lower by 4.2 points or 0.1 percent at 2,985.9 and the S&P 500 dipped 1.7 points or 0.1 percent at 1,418.1.

Major European markets ended higher on Thursday. While the U.K.'s FTSE 100 index closed just above the unchanged line, the German DAX index edged up by 0.3 percent and the French CAC 40 Index climbed 0.6 percent.

U.S. crude oil ended modestly lower on Thursday, after registering a massive gain in the previous session. Increased fears over the stalemate in the U.S. budget talks overshadowed some upbeat economic data.

Crude for February delivery ended down $0.11 or 0.1 percent at $90.87 a barrel on the New York Mercantile Exchange, after touching an intra-day high of $91.44.

by RTT Staff Writer

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