Asian stock markets are mostly trading higher on Friday on optimism over Spain after the debt-saddled nation presented a budget for 2013 with a package of spending cuts in an effort to bring down its huge deficit, which threatens the stability of the Euro.
Spain's budget for 2013 seeks to balance the country's deficit by focusing on spending cuts rather than tax increases. The government will also establish an independent fiscal authority to oversee the spending cuts, with 43 new reform laws to be enacted over the next six months.
The Japanese stock market opened higher, but pared gains and slipped into negative territory following the release of weaker than expected industrial output data for Japan.
The benchmark Nikkei 225 Index ended the morning session at 8,919.44, down 30.43 points or 0.34 percent.
Industrial output in Japan contracted a seasonally adjusted 1.3 percent on month in August, the Ministry of Economy, Trade and Industry said in Friday's preliminary reading. That missed forecasts for a fall of 0.5 percent after shedding 1.0 percent in July.
On a yearly basis, industrial production fell 4.3 percent - again shy of expectations for a decline of 3.4 percent following the 0.8 percent contraction in the previous month.
Upon the release of the data, the METI downgraded its assessment of industrial production, saying: "Industrial production appears to be weakened."
Sony Corp. (SNE) and Olympus Corp. are likely to announce a decision about a potential business and capital tie-up later today, according to a media report. Shares of Sony are down 0.43 percent, while Olympus shares are gaining 1.6 percent.
Among exporters, Canon Inc. (CAJ) is trading lower by 1.64 percent and Komatsu is down 0.06 percent, while Hitachi is gaining 1.6 percent.
Toyota Motor (TM) is down 1.4 percent. Among other automakers, Suzuki Motor is trading lower by 0.71 percent and Honda Motor (HMC) is declining 1.87 percent, while Nissan Motor is adding 0.90 percent.
Beverage producer Kirin Holdings is gaining 1.15 percent after the Nikkei business daily reported that company may sell its entire 15 percent stake in Singapore-based Fraser and Neave Ltd. to a major beverage producer in Thailand. The stake is valued at about 120 billion yen.
Other prominent gainers on the Nikkei include Aozora Bank, Kobe Steel, NEC Corp., Showa Denko, Nippon Kayaku, Toshiba Corp. and Hitachi Ltd. Losers include Pioneer Corp., Teijin Ltd., Nippon Yusen KK, Advantest Corp. (ATE) and NTN Corp. Aozora said Thursday that its shareholders have approved its plans to buy back its own shares.
On the economic front, average household spending in Japan was up 1.8 percent on year in August, the Ministry of Internal Affairs and Communications said, standing at 286,036 yen. That beat forecasts for an increase of 1.1 percent following the 1.7 percent gain in July.
The average of monthly income for workers' household also was up 1.8 percent on year to 470,470 yen, while consumption expenditures added an annual 0.9 percent to 310,643 yen.
The Ministry of Internal Affairs and Communications also said that Japan's unemployment rate came in at a seasonally adjusted 4.2 percent in August. That beat expectations for 4.3 percent, which would have been unchanged from the July reading.
The number of employed persons was 62.81 million, while the number of unemployed was 2.77 million. The participation rate was 59.1 percent, easing from 59.2 percent in the previous month. The job-to-applicant ratio was 0.83, matching forecasts and unchanged from the previous month.
Japan will also release data for retail sales, housing starts, vehicle production and construction orders - as well as the September reading for the Nomura/JMMA Manufacturing PMI.
In the currency market, the U.S. dollar is trading in the mid 77 yen range on Friday. In late-morning trades, the dollar was quoted in a range of 77.51-77.54 yen, down 0.19 yen from Thursday's close of 77.70-77.71 yen in Tokyo.
The Australian market is also trading in negative territory as investors doubted whether China's stimulus would be able to sustain commodities demand. Investors also had a muted reaction to the Spanish government's plan to reduce that country's deficit.
In late-morning trades, the benchmark S&P/ASX 200 Index was trading at 4,379.60, down 4.60 or 0.10 percent after touching a low of 4,368.50. The broader All ordinaries Index was down 3.30 points or 0.07 percent to 4,399.50.
In the mining sector, BHP Billiton (BHP, BBL) is gaining 0.06 percent and Newcrest Mining is gaining 3.23 percent. Rio Tinto (RIO, RIO.L) is trading lower by 0.82 percent.
Among banks, ANZ Bank (ANZ) is adding 0.04 percent, National Bank is up 0.20 percent and Westpac (WBK) is gaining 0.12 percent. Meanwhile, Commonwealth Bank is trading lower by 0.23 percent.
In the energy sector, Oil Search is declining 0.54 percent, while Origin Energy is adding 0.26 percent and Woodside Petroleum is up 0.03 percent.
Building products group Alesco has recommended a takeover offer from paint maker DuluxGroup after reaching agreement with its suitor. The two companies have agreed that Alesco may pay its shareholders a special dividend of up to 27 cents per share on top of DuluxGroup's offer of A$2.05 per share if DuluxGroup takes a 90 per cent stake in Alesco. Shares of Alesco are trading lower by 3 percent, while DuluxGroup shares are gaining more than 2 percent.
Shares in iron ore miner Sundance Resources have been placed in a trading halt ahead of an expected announcement from its Chinese suitor Hanlong Mining. On Monday, Sundance said it accepted a A$1.37 billion bid from Hanlong after the Chinese company reduced its original offer by about one fifth.
James Strong, the long-serving chairman of supermarket chain Woolworths Ltd., said he will retire in November. Strong has been on the Woolworths board for more than twelve years, and has served as its chairman for more than 11 years. He will be succeeded by Woolworths director Ralph Waters, who has been on the company's board since January 2011.The company's shares are down 0.48 percent.
Caltex Australia has confirmed it will close its loss-making Kurnell oil refinery in Sydney in the second half of 2014 after discussing the proposal with staff and unions. The company's shares are gaining 2.8 percent.
Among the other markets in the region, Singapore, Hong Kong, South Korea, Taiwan, Shanghai, Indonesia, Malaysia and New Zealand are trading marginally higher.
On Wall Street, stocks moved notably higher over the course of the trading day on Thursday after moving mostly lower over the past few sessions. The markets benefited from some upbeat U.S. jobs data and on optimism about the possibility of further stimulus from China.
Further buying interest was generated by the unveiling of Spain's budget for 2013, which seeks to balance the country's deficit by focusing on spending cuts rather than tax increases.
The Dow rose 72.46 points or 0.5 percent to 13,485.97, the Nasdaq jumped 42.90 points or 1.4 percent at 3,136.60 and the S&P 500 climbed 13.83 points or 1 percent to 1,447.15.
The major European markets also moved to the upside on Thursday following recent weakness. While the French CAC 40 Index rose by 0.7 percent, the German DAX Index and the U.K.'s FTSE 100 Index both edged up by 0.2 percent.
U.S. crude oil settled sharply higher Thursday, on renewed supply concerns from the Middle East. Investors also weighed the Energy Information Administration's weekly oil report of an unexpected decline in U.S. crude stockpiles for the week ended September 21, which was overshadowed by the developments in Greece and Spain yesterday.
Crude for November delivery jumped $1.87 or 2.1 percent to close at $91.85 a barrel on the New York Mercantile Exchange.
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