Nov 16, 2012

Hong Kong - Asian markets end on mixed note

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HONG KONG: Asian markets were mixed on Friday as eurozone and US fiscal woes continued to dent confidence, but Tokyo posted strong gains for a second straight session as the yen weakened further.

Tokyo surged 2.20 per cent by the close, adding 194.44 points to 9,024.16, Seoul was 0.53 per cent, or 9.89 points, lower at 1,860.83, while Sydney closed down 0.29 per cent, or 12.45 points, at 4,336.8.

Hong Kong stocks climbed 0.24 per cent, or 50.08 points, to 21,159.01 after suffering a big loss on Thursday, as Shanghai shed 0.77 per cent, or 15.56 points, to 2,014.73.

The eurozone debt crisis tipped the region back into recession in the three months to September, official data showed on Thursday, shrinking 0.1 per cent from the previous three months, when it contracted 0.2 per cent.

Germany, Europe's biggest economy and the crucial engine for growth in the currency bloc, expanded just 0.2 per cent, which was in line with expectations but still anaemic as it suffers the effects of the eurozone's debilitating crisis.

The growth data adds to already weak sentiment with the US fiscal cliff of tax hikes and spending cuts in focus as traders grow increasingly concerned that Democrats and Republicans will not be able to reach a deal to avert it.

If the package of measures comes in as planned on January 1, the world's number one economy will likely tip back into recession, which would have a devastating effect globally and especially on export-dependent nations in Asia.

Those fears were stoked this week when a re-elected President Barack Obama threw down the gauntlet to Republicans to accept tax increases for the rich, an issue they are not inclined to move on.

Wall Street remained negative on the possibility that a deal can be done, falling again on Thursday. The Dow lost 0.23 per cent, the S&P 500 fell 0.16 per cent and the Nasdaq shed 0.35 per cent.

However in Japan, the Nikkei index surged for a second straight day as the yen continued to be sold off following comments from the frontrunner to be the country's next prime minister that he would push for unlimited monetary easing.

Shinzo Abe, a former prime minister and now leader of the Liberal Democratic Party, said he would seek more control of the central bank and push for strong stimulus measures to spur the economy and lift inflation to 2-3 per cent.

The news from the man widely tipped to win next month's general election sent the yen tumbling as dealers bet on a flood of cash hitting the markets.

The dollar bought 80.99 yen in late Asian trade, from 81.16 yen in New York late Thursday but sharply up from 80.20 yen in Tokyo early Thursday.

The euro bought 103.22 yen, from 103.69 yen in New York and much higher than 102.17 yen early Thursday.

The euro was at US$1.2750, from US$1.2778 in US trade.

Oil prices fell, with New York's main contract, light sweet crude for delivery in December shedding two cents to US$85.43 a barrel and Brent North Sea crude for January delivery was up 12 cents to US$108.13.

Gold was at US$1,707.80 by 1115 GMT compared with US$1,723.86 late Thursday.

In other markets, Wellington ended flat, edging down 3.66 points at 3,947.84; Taipei fell 13.77 points, or 0.19 per cent, to 7,130.07; Manila rose 0.45 per cent, or 24.46 points, to 5,439.28; Kuala Lumpur shares lost 2.40 points, or 0.15 per cent, to close at 1,629.28; Bangkok gained 0.48 per cent or 6.11 points to 1,280.13; and Mumbai fell 0.88 per cent, or 162.0 points, to 18,309.37.

Jakarta was closed for a public holiday.

- AFP/ms

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