Dec 6, 2012

Hong Kong - Asian shares mixed, focus on US

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HONG KONG: Asian markets were mixed on Thursday following a broadly positive lead from Wall Street, with traders monitoring talks in the United States aimed at averting the fiscal cliff.

The yen remained under pressure on expectations of monetary easing by the central bank, providing a fillip to Japanese equities.

Tokyo rose 0.76 per cent by the break, Hong Kong added 0.23 per cent and Seoul gained 0.72 per cent, while Sydney lost 0.18 per cent and Shanghai eased 0.19 per cent.

In the United States the Institute for Supply Management said its monthly index on activity in the vast services sector rose to 54.7 in November, from 54.2 in October. Anything above 50 indicates growth.

It supports a consensus that the world's number one economy is gaining strength despite a set of downbeat manufacturing figures earlier this week.

In New York the Dow closed 0.64 per cent higher while the S&P 500 rose 0.16 per cent. But the Nasdaq fell 0.77 per cent, hit by a big loss in tech giant Apple.

Eyes are on Washington, where Republicans and Democrats are locked in talks aimed at agreeing a deficit-cutting plan that will avert the fiscal cliff of huge tax hikes and spending cuts due to come into effect on January 1.

There is a broad agreement that if the $600 billion package comes in the country will likely tip into recession.

Some Republicans have already broken ranks with the party and said they could agree to raising tax rates for the wealthy -- an issue the leadership has said previously it will not budge on.

"Personally, I know we have to raise revenue; I don't really care which way we do it," Republican Senator Tom Coburn told MSNBC television.

Despite Treasury Secretary Timothy Geithner saying no deal would be reached without tax rates going up, he did say: "I think there has been some progress and I think we're going to get there."

In forex trade the dollar held firm against the yen in Asia, changing hands at 82.43 yen, compared with 82.42 late in New York Wednesday.

The euro bought $1.3050 and 107.55 yen in early Asian trade, compared with $1.3064 and 107.71 yen.

Dealers have been selling Japan's currency since opposition leader Shinzo Abe -- who is expected to become the next prime minister -- said last month he would push an aggressive monetary easing policy if he won December 16 polls.

On oil markets New York's main contract, light sweet crude for delivery in January, was down 16 cents to $87.72 a barrel and Brent North Sea crude for January declined nine cents to $108.72.

Gold was at $1,692.27 at 0240 GMT compared with $1,701.65 late on Wednesday.

- AFP/ck

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