Nov 20, 2012

Hong Kong - Asian markets mixed on US hopes, euro eases

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HONG KONG: Asian markets were mixed on Tuesday as confidence that US politicians will agree a deal to avert a fiscal cliff was offset by profit-taking following a recent strong rally.

The decision by Moody's to downgrade French debt staunched a rise in the euro early on but it picked up in the afternoon, stoked by hopes that eurozone leaders will agree to hand Greece its latest batch of bailout cash.

Tokyo, which has risen about five percent in the past three sessions, ended the day 0.12 percent lower on profit-taking and after the Bank of Japan held off any new monetary easing measures following a policy meeting.

The Nikkei shed 10.56 points to 9,142.64.

Sydney finished 0.56 percent, or 24.3 points, higher at 4,385.7 while Seoul was up 0.64 percent, or 12.08 points, to close at 1,890.18.

Hong Kong fell 0.16 percent, or 33.78 points, to 21,228.28, while Shanghai eased 0.40 percent, or 8.06 points, to 2,008.92.

Wall Street provided a strong lead as markets opened for the first time since Republicans and Democrats on Friday pledged to work on a budget that would avoid the fiscal cliff of tax hikes and spending cuts due on January 1 that would tip the economy into recession.

Global shares have tumbled in recent weeks on fears the two parties would not find a compromise but the comments from Congressional leaders have soothed fears.

The Dow climbed 1.65 percent, the S&P 500 jumped 1.99 percent and the Nasdaq surged 2.21 percent.

The rally was also boosted by figures showing that existing home sales rose 2.1 percent in October from September and home builder confidence improved for a seventh straight month in November.

However, European woes continue to nag. On Monday it was France in the spotlight after Moody's cut its gold-plated AAA credit grade by one notch to "Aa1" and maintained a negative outlook, meaning another downgrade was possible.

It cited the the country's "disproportionately large" exposure to the troubled countries on Europe's periphery. Fellow ratings agency Standard & Poor's made a similar move in January.

In morning European trade the euro bought $1.2800 and 103.98 yen, compared with $1.2778 and $103.99 yen in New York late Monday.

The single currency had been at $1.2816 and 104.25 yen shortly before Moody's made its announcement.

The dollar was trading at 81.21 yen in Tokyo, compared with 81.40 yen in New York.

The yen remains under pressure - which has sent the Nikkei surging in recent days - after the frontrunner to become Japan's next prime minister in December said he would embark on an aggressive monetary easing policy to help the economy.

In the early afternoon the central Bank of Japan said it would hold off any fresh monetary easing - after two such moves in the past two months - while it also warned the economy faced an uncertain future.

It also kept interest rates on hold.

Investors had been buying the euro on a likely agreement between regional finance ministers to hand Athens the latest instalment of cash it needs to avoid bankruptcy.

They will try Tuesday to reach a framework agreement at a meeting on Greece and heal a split with the International Monetary Fund over a key debt reduction target.

"We are headed for an agreement, but a partial one," said a European diplomat who asked not to be named. Another source underscored the will to reach an agreement, but noted a finalised deal could take a few more days.

On oil markets prices eased. New York's main contract, light sweet crude for delivery in January, was down 38 cents to $88.90 a barrel in the afternoon and Brent North Sea crude for January delivery fell 28 cents to $111.42.

Gold was at $1,733.45 at 1050 GMT compared with $1,723.10 late Monday.

In other markets:

Taipei rose 16.73 points, or 0.23 percent, to 7,145.77.

Smartphone maker HTC fell 3.08 percent to Tw$236.0 while chip giant TSMC was 0.44 percent higher at Tw$90.4.

Manila closed 0.94 percent higher, adding 51.03 points to 5,500.58.

Banco de Oro added 0.29 percent to 68.30 pesos, Philippine National Bank surged 11.69 percent to 84.10 pesos, while Metropolitan Bank finished 1.06 percent up at 95 pesos.

Wellington climbed 0.77 percent, or 30.37 points, to 3,972.97.

Fletcher Building rose 3.7 percent rise to NZ$7.65 and Telecom was down 0.21 percent at NZ$2.38.

Singapore closed up 0.27 percent, or 7.89 points to 2,958.82.

Olam International plunged 7.47 percent to S$1.61 while Keppel Corp gained 1.60 percent to S$10.17.

Kuala Lumpur gained 0.89 points, or 0.05 percent, to end at 1,624.20.

UEM Land lost 1.6 percent to 4.82 ringgit, RHB Capital eased 0.9 percent to 7.59 while British American Tobacco gained 1.0 percent to 58.54.

Jakarta ended down 0.02 percent, or 1.073 points, at 4,312.366.

Palm oil firm Sinar Mas Agro Resources and Technology dropped 2.86 percent to 6,800 rupiah and retailer Hero Supermarket slipped 2.44 percent to 4,000 rupiah.

Bangkok lost 0.56 percent, or 7.24 points, to 1,276.41.

Telecoms company Advanced Info Service dropped 3.28 percent to 191.50 baht, while electricity firm EGCO added 0.78 percent to 129.00 baht.

Mumbai dropped 0.05 percent, or 9.68 points, at 18,329.32 points.

IT outsourcer Infosys was down 1.46 percent at 2,325.40 rupees and carmaker Mahindra & Mahindra was up 3.25 percent at 938.35 rupees.

- AFP/de

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