Asian markets took turnaround on Tuesday

Nikkei, Hang Seng edge higher while Shanghai, Sensex finish lower
Stock markets in Asian region rebounded on Tuesday 2 February 2010, led by resources stocks, after strong US manufacturing data raised hopes the global economic recovery was on a firmer footing as governments move to withdraw stimulus spending.
On Wall Street, the Dow closed with a triple-digit rally, as January manufacturing activity far exceeded expectations and better-than-expected earnings from Exxon Mobil helped the market look past weak construction spending data. The Dow Jones Industrial Average gained 118 points, or 1.2%, to 10,186. The S&P 500 picked up by 15 points, or 1.4%, at 1089 and the Nasdaq improved by 24 points, or 1.1%, at 2171.
On the economic front, the Institute for Supply Management said its manufacturing index rose to 58.4 in January. The measure was a significant improvement from December's downwardly revised level of 54.9. Meanwhile, construction spending slumped 1.2% in December. The Census Bureau also revised down November's reported dip of 0.6%, to a bearish 1.2% slump.
In other macroeconomic news, the Commerce Department said personal spending rose 0.2% in December, which was slightly below the 0.3% increase that economists had been expecting and well below November's 0.7% rise. For 2009, personal spending declined 0.4%. Personal income slightly exceeded expectations, rising 0.4% in December.
On the political front, President Obama kicked off the month with the introduction of a proposed $3.8 trillion budget that would push the federal deficit to $1.6 trillion with additional stimulus spending aimed at job growth. The budget, however, aims at lowering the deficit in the longer term with a three-year spending freeze.
In the commodity market, crude oil rose for a second day in New York after manufacturing in the U.S. increased at the fastest pace since August 2004, adding to signs that fuel use in the world's biggest energy-consuming country may gain.
Crude oil for March delivery climbed as much as $1.01, or 1.4%, to $75.44 a barrel in electronic trading on the New York Mercantile Exchange. It was at $75.02 at 9:25 a.m. London time. Yesterday, the contract rose 2.1% to settle at $74.43, the biggest one-day increase since 4 January 2010.
Brent crude oil for March settlement rose as much as $1.41, or 1.9%, to $74.52 a barrel on the London-based ICE Futures Europe exchange. It was at $73.70 at 9:26 a.m. London time. Yesterday, the contract climbed 2.3%, the most since 4 January 2010, to settle at $73.11.
Gold weakened as some investors opted to sell the metal after the biggest advance in three months and the dollar resumed its rise against major currencies. Gold for immediate delivery fell 0.2% to $1,103.35 an ounce at 2:39 p.m. Singapore time, paring yesterday's 2.3% gain, the biggest advance since 3 November 2009.
In the currency market, Australia dollar drops sharply after RBA unexpectedly left rates unchanged at 3.75% while markets were generally expecting another 25bps hike. The US dollar remains in range as risk aversion receded overnight on rebound in US stocks and rebound in Asian equity markets.
The Japanese yen bounced from early weakness against major counterparts on Tuesday as the Reserve Bank of Australia's surprise decision to hold its key interest rate at 3.75% prompted traders to buy safe-haven currencies like the dollar and the yen. Japan's currency yen was quoted at 90.49 against the greenback.
The Hong Kong dollar was trading at HK$ 7.7673 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 trades, the Australian dollar fell across the board after the Reserve Bank stunned markets by leaving rates unchanged at 3.75%. The dollar, which was among the best performing currencies in the world last year, fell as low as $US0.8784, shedding more than a cent following the central bank decision. At the local close it had recovered a little and was trading at $US0.8803.
In Wellington trades, the Reserve Bank of Australia's unexpected decision to keep its official cash rate at the same level saw the New Zealand dollar also dragged against the US greenback this afternoon. After recording a level of US 70.02 cents at 5pm yesterday, the NZD reached a high of US 70.96 cents during the afternoon before being dragged down to US 70.58 cents at 5pm following news of RBA.
The South Korean won closed at 1,159.90 won against the U.S. dollar, up 9.60 won from Monday's close on reports that the country's foreign exchange reserves reached a fresh record high of US$273.69 billion in January.
The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.060, 0.0410 up from Monday's close of NT$32.1010.
In equities, Asian stock markets finished mostly higher as gains in Wall Street buoyed sentiment, with automakers in Japan rising after Toyota Motor took steps to fix recalled vehicles and as the region's resources plays rebounded.
In Japan, the share market spurted on the back of triple digit gains in Wall Street overnight, softer yen, and stronger commodity prices. The rally also supported by broad based bargain hunting after the latest data showed a jump in manufacturing activity across Asia, the euro zone and the US. At the closing bell, the Nikkei 225 Stock Average index was at 10,371.09 i.e. 166.07 points or 1.66% higher, while the broader Topix of all First Section issues on the Tokyo Stock Exchange gained 14.21 points, or 1.58%, to 912.82.
On the economic front, average monthly wages at Japanese companies with at least five employees fell 3.9% in 2009 from the previous year to 315,164 yen, the Health, Labor and Welfare Ministry said Tuesday.
Japan's monetary base rose 4.9% in January from a year earlier for the 17th straight month of increase, the Bank of Japan said Tuesday, standing at 98.067 trillion yen after the 5.2% annual increase in December.
In Mainland China, the stocks reversing morning gains to fell fresh four month closing low, as concern grew countries worldwide may step up plans to withdraw stimulus measures and China will curb lending overshadowed gains by materials and energy. Market participants' indulged to quick cash out gains in last half hour on mounting concerns over more tightening from the government to prevent the economy from overheating.
At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, fell 6.65 points, or 0.23%, to 2,934.71, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange erased 76.18 points, or 0.64%, to 11,912.93. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, slid 0.2%, to 3,146.50.
On the economic front, sales of new homes, excluding those designated for relocated residents under urban redevelopment plans, plunged 51% to 700,000 square meters last month, Shanghai Uwin Real Estate Information Services Co said yesterday. The decline was due to sluggish buying momentum, which was affected by a series of government cooling measures that aim to curb property speculation.
In Hong Kong, the key share ended edge higher, helped by gains among materials and resources shares that had been heavily sold in recent days. However, the key index erased almost all intraday gains of 1.4% as lingering worries of China further tightening step, weaker European market, and as US index futures indicates weaker opening bell.
At the closing bell, the Hang Seng Index was up 28.43 points, or 0.14%, to 20,272.18, while the Hang Seng China Enterprise, which tracks the overall performance of 43 Mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, decreased 51.29 points, or 0.44%, to 11,570.35.
In Australia, the share market spurted on tracking firm cues from offshore market and stronger commodities prices. A surprise decision by the RBA to leave the official cash rate on hold at 3.75% did little to sway investor optimism, with the market closing at levels seen in early trade before the decision. At the closing bell, the benchmark S&P/ASX200 index soared 81.20 points, or 1.79%, to 4,605.20, meanwhile the broader All Ordinaries has gained 84 points, or 1.85%, to 4,628.80.
On the economic front, according to the NAB's monthly business survey, business confidence dropped from 19 points in November to 8 points in December. The decline has been largely attributed to recent interest rate hikes.
In New Zealand, stock market ended in the red region despite a fairly strong start to the day. New Zealand shares inched up early today in line with most of the Asian markets trailing a sturdy start on the Wall Street overnight after United States stocks jumped as manufacturing sector data came in better than expected. At the closing today, the NZX 50 lost 0.11% or 3.6 points to 3147.37. Meanwhile, the NZX 15 declined by 0.11% or 6.25 points to close at 5672.29.
On the economic front, the Reserve Bank has released a consultation paper on possible changes to liquidity requirements for savings institutions and finance companies, in a bid to stop such institutions from failing. The non-bank deposit takers consultation document on liquidity policy is the result of a law that came into force last year, which required all non-bank deposit takers to comply with a risk management plan, which includes procedures for managing liquidity risk.
In South Korea, stocks closed lower as a surprise rate freeze by the Australian central bank renewed concerns about the strength of a global economic recovery. Reversing earlier gains, the benchmark Korea Composite Stock Price Index (KOSPI) lost 10.63 points to end at 1,595.81.
In Singapore, the share market closed below the water after a surge in the morning session as player's quick cash out gains on any strength on concerns of more downside in near term as investors continued to be wary of possible tightening measures from Beijing. There were market concerns on the tightening policy, and the Singapore stocks were unable to rebound strongly in the afternoon. At the closing bell, the blue chip Straits Times Index was at 2,720.87, fell 15.30 points or 0.56%.
In Taiwan, stock markets tanked to three months closing low as investors worried that Taiwan-China trade pacts would be affected after the United States arms sale to Taiwan. The benchmark Taiex share index extended the losses for the third session by finishing the day lower by 95.06 points or 1.26% at 7429.61 � the lowest closing since 5 November 2009 when market finished the day at 7417.46.
On the economic front, Taiwan's economic monitoring indicator flashed the second consecutive yellow-red in December 2009, with the composite index remaining 37. According to the Cabinet-level Council for Economic Planning and Development (CEPD), in December of 2009, Taiwan's export orders reached US$31.7 billion, back to the level before the global financial tsunami erupting in the second half of 2008. In the same month the leading economic indicator edged up by 0.8% from a month earlier to 104.6; while the annualized 6-month rate of change fell by 1.1% to 19.9%.
In other economic news, the Taiwan Institute of Economic Research (TIER), a major economic think tank in Taiwan, adjusted upward its forecast for Taiwan's economic growth by 0.6%to 4.81% for 2010, thanks to the obvious economic recovery.
Chen Miao, director at Economic Forecasting Center of TIER, indicated that the economy has recently recovered remarkably and domestic manufacturers have largely increased capital spending to expand operations, and therefore TIER predicted that the private investments this year might chalk up by 7.19%.
In Philippines, the stock market continued to hover around the three months low level, as investors continued to sell the key heavy weight stocks. However, after falling to a three-month low yesterday, share prices recovered in early trade tracking the gains in Wall Street overnight. Nevertheless, inflation concerns weighed investor's sentiment lower. The central bank expects the rise in consumer prices to range between 4.5% and 5.4%, within its 3.5-5.5% target for this year. At the final bell, the benchmark index PSEi lost 0.66% or 19.03 points to 2,864.18, while the All Shares index tumbled 0.96% or 17.84 points to 1,830.55.
In India, key benchmark indices extended losses to fresh intraday low in late trade as investors turned cautious ahead of the opening of the large follow-on public offer (FPO) of state-run power generation firm NTPC on Wednesday, 3 February 2010. The BSE 30-share Sensex was down 192.59 points or 1.18% to 16,163.44. The S&P CNX Nifty was down 69.60 points or 1.42% to 4830.10.
Elsewhere, Malaysia's Kula Lumpur Composite index finished slightly higher at 1263.76 while stock markets in Indonesia's Jakarta Composite index fell by 7.30 points ending the day lower at 2580.25.
In other regional equities, European shares moved off early lows on Tuesday, as gains for miners offset losses for oil and gas companies. On the regional front, the FTSE 100 index was trading higher by 0.24% or 12.31 points at 5,260, while the French CAC-40 index rose 0.6% or 24.26 points to 3,786 and the German DAX index also rose 0.6% or 33.46 points to 5,688.