Asian markets elevates as Dubai debt crisis fears fade

Seoul, Shanghai, Sydney extended gains while Sensex finish lower
Stock markets in Asian region stretched their gains further on Wednesday, 2 December 2009, tracking cues from Wall Street where stocks rallied sharply overnight on some encouraging economic reports and easing worries over Dubai debts, Asian markets are mostly trading with notable gains.
On Wall Street, the major indices clawed back nearly all of their losses from the past week on Tuesday, as better-than-expected pending home sales and construction spending helped investors shrug off recovery doubts triggered by Dubai's debt troubles. The Dow Jones Industrial Average finished higher by 127 points, or 1.2%, to 10,472. The S&P 500 rose 13 points, or 1.2%, at 1109. The Nasdaq rose 31 points, or 1.5%, to 2176.
In the commodity market, crude oil traded near $78 a barrel in New York after an industry report showed U.S. supplies gained, raising concern that fuel demand in the biggest energy-consuming nation may be slow to recover.
Crude oil for January delivery traded at $78.10 a barrel, down 27 cents, in electronic trading on the New York Mercantile Exchange at 3:48 p.m. Singapore time. Yesterday, the contract rose $1.09, or 1.4 percent, to settle at $78.37.
Brent crude oil for January settlement was at $79.17 a barrel, down 18 cents, on the London-based ICE Futures Europe exchange at 3:39 p.m. Singapore time. The contract yesterday rose 88 cents, or 1.1%, to end the session at $79.35.
Gold surged to a record for a second day as investors stepped up purchases to protect their wealth against a slumping dollar. Spot gold climbed as much as 1.6 percent to $1,215.85 an ounce, and was at $1,214.39 at 1:52 p.m. in Singapore. Gold for February delivery in New York climbed to an all-time high of $1,216.90.
In the currency market, the US dollar recovered from the previous session's lows against major rivals in Asian trading, gaining against its Japanese counterpart as investors digested the Bank of Japan's newest easing steps.
The Japanese currency softened against major counterpart as sign of a recovering global economy increased traders appetite for risk, diminishing the value of lower-yielding currencies. The yen was quoted at 87.03 against greenback.
The Hong Kong dollar was trading at HK$ 7.7502 against the dollar. Actually the Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.
In Sydney trade, the Australian dollar rose on Wednesday, aided by firm Asian stocks, record gold prices and easing fears over the impact of Dubai's credit crisis. At the local close, the dollar was trading at $US0.9270, up from Tuesday's close of $US0.91331.
In Wellington trade, the New Zealand dollar traded in a narrow range after rising in response to a rise in official Australian interest rates yesterday and higher commodity prices. At the local close, the NZ dollar was buying US72.74c from US72.82c in the morning, which was around its highest level in nearly a week. It was US71.80c at 5pm yesterday.
The South Korean won closed at 1,154.0 won to the U.S dollar, up 6.1 won from Tuesday's close of 1,161.1.
The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.1430, 0.0560 up from Monday’s close of NT$32.1990.
In the equities, financial and resources stocks led gains in Asia as concern about Dubai's debt problems faded and gold prices rallied to a record. A 2009 high for the Dow Jones Industrial Average on Tuesday also encouraged buyers.
In Japan, shares market managed to finish higher extending winning streak for third day in row after fluctuating in and out of the boundary at least five times. Market participant elected to buy at dip, encouraged by positive offshore leads and firmer commodity prices. Investors also tracked the uptrend in other Asia-pacific bourses and higher European futures.
At the closing bell, the Nikkei 225 Stock Average index was at 9,608.94, spurted 36.74 points or 0.38% from its previous close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange gained 0.98 points, or 0.11%, to 858.74.
On the economic front, the Japan Automobile Dealers Association said new vehicle sales in Japan rose 36% in November from a year earlier, up for the fourth consecutive month, on the back of tax breaks and subsidies for the purchase of eco-friendly vehicles. Sales of new vehicles excluding mini vehicles in the reporting month totaled 293,410 units
The Bank of Japan said the monetary base in Japan was up 3.8%on year in November, standing at 92.2 trillion yen after the 4.4% annual increase in October. Current account balances were up 43.4% on year to 11.9 trillion yen after adding 43.8 percent in October.
The Bank of Japan decided at an extraordinary policy meeting Tuesday to inject about 10 trillion yen into the financial system, introducing a new emergency fund-supply operation to lower longer-term interest rates to fight deflation.
In Mainland China, share market followed their global peers higher, endured gains for third day in row on bolstered optimism over economic recovery in the United States and China. A rise in commodity prices boosted related stocks, while gold miners benefited after the spot gold rose above $1,200 an ounce.
The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, surged 34.39 points, or 1.06%, to 3,269.75, meanwhile the Shenzhen Component Index on the smaller Shenzhen Stock Exchange advanced 0.86% or 118.34 points, to 13,800.50. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, spurted 1.02%, to 3,597.33.
In Hong Kong, the stock market were buoyed by banks, properties, and commodity related stocks on tracking strong cues from offshore market and firmer finish of base metal prices in London on Tuesday. Overnight the Dow Jones Index scored triple digit gains, while European share markets posted their biggest one-day gain in four and a half months.
The Hang Seng Index spurted 176.42 points, or 0.8%, to 22,289.57, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, escalated 111.81 points, or 0.85%, to 13,341.17.
In Australia, the stocks extended winning streak for third consecutive day on tracking strong cues from offshore market and firmer finish of base metal prices in London on Tuesday. Overnight the Dow Jones Index rose 1.2% to a 14 month high, while European share markets posted their biggest one-day gain in four and a half months. At the closing bell, the benchmark S&P/ASX200 index spurted 43.4 points, or 0.92%, to 4,762.4, meanwhile the broader All Ordinaries surged 43.6 points, or 0.92%, to 4,776.7.
In New Zealand, benchmark index ended the trading day almost flat although in the positive territory. The share market registered the third consecutive decline in a row after rising by 1% yesterday in line with the surge witnessed in global markets. The surge in global stocks came on upbeat economic news from around the world and as fears eased that Dubai's debt woes could rekindle a credit crisis and choke improving economies. The NZX50 ended almost flat in the positive terrain at 0.09% or 2.85 points to 3149.45. The NZX 15 lost 0.09% or 5.07 points to close at 5722.25.
In South Korea, stocks finished higher as foreign investors snapped up shares on waning Dubai debt problem anxiety. The benchmark Korea Composite Stock Price Index (KOSPI) spiked 21.91 points to end at 1,591.63, gaining ground for a third-consecutive session after Dubai debt problems plunged the key index to the lowest level in four months on Friday.
In Singapore, stocks market rose on tracking cues from Wall Street overnight and firmer other Asian bourses, helped investors shrug off recovery doubts triggered by Dubai’s debt troubles. Commodity supplier outperformed in the market after the base metal prices in the London Metal Exchange Index climbed 1.9% yesterday and gold prices hit all time high above $1,200 an ounce. At the closing bell, the blue chip Straits Times Index was at 2,796.34, escalated 25.39 points or 0.92%.
In Taiwan, stock market advanced for the third straight session, led by real estate players on hopes of Greater China investment in the island's property market. Rally at Wall Street also sparked hopes of a sustainable recovery, as financials stocks rose after China said it hopes to start a currency clearing system with Taiwan soon. The benchmark Taiex share index extended its gains for the third straight session, by finishing higher by 28.39 points or 0.37% in a day, closing at 7677.62.
In India, key benchmark indices ended a choppy trading session lower as pivotals underwent correction after two straight sessions of gains. The BSE 30-share Sensex was down 28.36 points or 0.16% to 17,169.91. It gained 131.41 points at the day's high of 17,329.68 in early trade, its highest level since 20 October 2009. The Sensex lost 55.91 points at the day's low of 17,142.36 at the fag end of the trading session. The S&P CNX Nifty was up 1.25 points or 0.02% to 5123.25. Nifty hit a high of 5161.75 in early trade, its highest since 20 October 2009.
On the economic front, the World Bank has committed to increase its lending to India to about $7 billion this year from an average $2.3 billion in the previous four years, the finance ministry said in a statement. India has also sought early completion of the process of voice and quota reforms at the World Bank to increase the representation of emerging and developing countries, the ministry said.
Elsewhere, Malaysia's Kula Lumpur Composite index finished higher at 1271.15 while stock markets in Indonesia’s Jakarta Composite index gained 19.06 points ending the day higher at 2471.56.
In other regional market, European shares edged higher on Wednesday, tentatively building on sharp gains made in the previous session when worries about Dubai's debt woes receded. On a regional level, the U.K. FTSE 100 index edged up 0.1% or 5.98 points at 5,318, the German DAX index rose 0.1% or 4.18 points to 5,781 and the French CAC-40 index advanced 0.2% or 9.08 points to 3,785.