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Asian Markets Pare Gains As U.S. Tax Bill Vote Delayed


Asian stock markets are mostly higher on Friday, though some of the markets have pared early gains following news that the U.S. tax bill vote will be delayed. The markets in the region opened notably higher following the overnight gains on Wall Street amid optimism about the outlook for U.S. tax reform.

Senate Republicans delayed voting on their tax bill after a setback forced them to tweak the plan just hours ahead of a planned final vote Thursday night. The Senate will resume votes on Friday.

The Australian market is rebounding, with investors going bargain hunting following the positive cues overnight from Wall Street on optimism over U.S. tax reform.

In late-morning trades, the benchmark S&P/ASX 200 Index is adding 37.10 points or 0.62 percent to 6,007.00, off a high of 6,011.40 earlier. The broader All Ordinaries Index is up 34.50 points or 0.57 percent to 6,091.70.

The big four banks - ANZ Banking, National Australia Bank, Commonwealth Bank and Westpac - are higher in a range of 0.6 percent to 1.2 percent.

Oil stocks are also higher as crude oil prices rose overnight. Oil Search is rising more than 2 percent, Woodside Petroleum is adding almost 2 percent and Santos is advancing more than 1 percent.

Among the major miners, BHP Billiton is rising almost 1 percent and Rio Tinto is adding 0.3 percent, while Fortescue Metals is down 0.5 percent, after iron ore prices climbed overnight.

Gold miner Newcrest Mining is down 0.4 percent, while Evolution Mining is unchanged after gold prices fell.

Telstra has lowered its full-year outlook for earnings and revenue, citing the temporary suspension of the national broadband network rollout by NBN Co. The telecom company's shares are losing 0.5 percent.

Billabong International has received a confidential, non-binding merger proposal from Boardriders, whose majority owner Oaktree Capital already has a 19 percent stake in Billabong. The surfwear retailer's shares are gaining more than 21 percent.

Godfreys Group said that board member Brendan Fleiter will take over as chairman and Jason Gowie will be its new CEO replacing John Hardy. The company also lowered its full-year earnings outlook. The vacuum cleaner retailer's shares are losing more than 15 percent.

On the economic front, the latest survey from the Australian Industry Group showed that the manufacturing sector in Australia continued to expand in November, and at an accelerated rate, with a PMI score of 57.3. That's up sharply from 51.1 in October, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the Australian dollar is lower against the U.S. dollar. In early trades, the local unit was quoted at US$0.7565, down from $0.7590 on Thursday.

The Japanese market rose, with the record highs overnight on Wall Street and a weaker yen boosting investor sentiment. However, the market has pared gains as investors digested a raft of local economic data.

In late-morning trades, the benchmark Nikkei 225 Index is rising 57.31 points or 0.25 percent to 22,782.27, off a high of 22,994.31 in early trades.

Shares of Sharp Corp. are gaining more than 6 percent after the company received approval from the Tokyo Stock Exchange to return to the first section of the exchange on December 7, 2017, after being pushed to the second section of the market last year.

In the banking sector, Mitsubishi UFJ Financial is rising 0.7 percent and Sumitomo Mitsui Financial is advancing almost 1 percent. Among automakers, Toyota is rising 0.2 percent and Honda is adding almost 1 percent.

In the oil space, Inpex is rising almost 2 percent and Japan Petroleum is gaining almost 3 percent as crude oil prices rose overnight.

Meanwhile, the major exporters are lower despite a weaker yen. Sony and Panasonic are lower by more than 1 percent each, Canon is declining 0.2 percent and Mitsubishi Electric is edging down less than 0.1 percent.

Among the market's best performers, Komatsu is rising more than 4 percent, Chiyoda Corp. is gaining almost 4 percent and Concordia Financial Group is higher by more than 3 percent.

On the flip side, Sumitomo Electric Industries is losing almost 3 percent, DeNA Co. is lower by more than 2 percent and Comsys Holdings is down 2 percent.

In economic news, the latest survey from Nikkei revealed that the manufacturing sector in Japan continued to expand in November, and at a faster pace, with a 44-month high PMI score of 53.6. That's up from 52.8 in October, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

The Ministry of Internal Affairs and Communications said Consumer prices in Japan slowed to 0.2 percent on year in October. That was in line with expectations and down from 0.7 percent in September.

The average of household spending in Japan was flat on a yearly basis in October. That beat forecasts for a decline of 0.3 percent on year, which would have been unchanged from the September reading.

The unemployment rate in Japan came in at a seasonally adjusted 2.8 percent in October, unchanged from the September reading and in line with expectations.

In the currency market, the U.S. dollar is trading in the mid 112 yen-range on Friday.

Elsewhere in Asia, South Korea, New Zealand, Singapore and Hong Kong are also higher, while Shanghai and Taiwan are edging lower. The markets in Malaysia and Indonesia are closed in observance of the birth of the prophet Muhammad.

On Wall Street, stocks closed higher on Thursday, reflecting optimism about the outlook for tax reform after Senate Republicans cleared a key procedural hurdle. The Senate voted 52 to 48 along party lines on Wednesday to begin formal debate on the GOP tax reform bill after negotiations convinced Republican holdouts to vote for the legislation.

The Dow surged up 331.67 points or 1.4 percent to 24,272.35, the Nasdaq climbed 49.58 points or 0.7 percent to 6,873.97 and the S&P 500 advanced 21.51 points or 0.8 percent to 2,647.58.

The major European markets also moved to the downside on Thursday. While the U.K.'s FTSE 100 Index slid by 0.9 percent, the French CAC 40 Index and the German DAX Index fell by 0.5 percent and 0.3 percent, respectively.

Crude oil prices edged higher on Thursday after the Organization of the Petroleum Exporting Countries and Russia agreed to extend their oil production-cut agreement to the end of 2018. January WTI oil settled at $57.40 a barrel on the New York Mercantile Exchange, up $0.10 or less than 0.2 percent.

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