FXS: Asian Shares Rally Despite US Econ Woes; HSI Jumps 7.5%
Asian Shares Rally Despite US Econ Woes; HSI Jumps 7.5%
SINGAPORE (Dow Jones)--Asian share markets were higher Monday after Wall Street rose on Friday, but the gains were coming in very low volume and with data due out over the coming week expected to show further deterioration in the Asian economic outlook.
"A few people are trying to bottom-pick and some strategists are getting positive," said Goldman Sachs JBWere senior trader Patrick Crabb in Australia.
"I'm happy to see it bounce a bit, and we may see a bit of a bear market rally in December and a bit of Obama euphoria, but the world's still a very ugly place in the first half of 2009."
Japan's Nikkei 225 was up 4.8% with Korea's Kospi jumping 7.3% and Australia's S&P/ASX 200 gaining 4.4%; Taiwan's main index was 4.7% higher.
India's Sensex was up 4.1% after the central bank announced interest rate cuts on the weekend, and after the government announced a fiscal stimulus package which included tax cuts.
Hong Kong stocks ended the morning up 7.5% with some extra, late-morning impetus from a Bloomberg report that quoted the Hong Kong Financial Secretary John Tsang as saying the so-called "through train" plan for Chinese individuals to buy Hong Kong stocks was still on track.
U.S. stock futures were quoted 1.5%-2% higher in screen trade while Nymex crude oil futures were up nearly $2, a reflection of the somewhat more positive mood in markets.
But currency trade was quiet with the Japanese yen not falling back despite risk aversion fading somewhat, and overall volatility was likely to persist, given the warning lights flashing on the U.S. economy after a poor reading on November non-farm payrolls on Friday.
"Job losses of the magnitude (seen in November) dismiss the notion this recession's just another blip that will blow over soon," said Rabobank's Asian research head, Jan Lambregts.
The coming week was heavy with key Asian data including trade figures from China and Taiwan and core machinery orders from Japan; there were also central bank meetings on the slate in Korea and Taiwan.
Investors were still waiting for news on the potential bailout of the big U.S. auto makers, with the Wall Street Journal reporting negotiations had slowed over the weekend as Congress and the White House debated creating an "auto czar" position, who would oversee a restructuring of the industry.
"We'd like the U.S. Congress to make clear what it wants to do with the auto makers as soon as possible," said Mitsubishi UFJ Trust and Banking senior dealer Akio in Tokyo.
Some said the stock market gains could fade soon.
"This seems to be a dead cat bounce," said First Grade Holdings managing director Astro del Castillo in Manila; "market turnover remains anemic as investors remain wary about the prospects of the global economy in the coming year."
In Hong Kong, shares of China-based banks were higher with traders also citing a delayed boost from a China Securities Journal report on Friday that the government might reduce the business tax for Chinese banks, to offset the negative margin impact from rate cuts; China Merchants Bank was up 11.2%.
The Shanghai Composite Index had gained 3.3%.
Korean-listed China-linked stocks were higher in turn with Hyundai Heavy adding 14.7% and Posco up 7.7%.
Shares of Japanese non-life insurers were gaining after insurance sector stocks jumped in the U.S. on Friday, with Tokio Marine Holdings up 8% and Mitsui Sumitomo Insurance Group Holdings adding 9.2%.
In Australia, mining and energy stocks were gaining with Santos 10% higher despite the deferral of its Reindeer gas development.
Taiwan financial stocks were on the rise after recent weakness with Cathay Financial up 6.6%, while technology stocks were gaining, too, with Hon Hai Precision adding 6.3%.
India banking stocks were higher after the central bank news and fiscal package with ICICI Bank up 5.6% and HDFC Bank adding 4.9%.
Thai shares were 2.8% higher with Indonesia's market up 0.3% and Philippine shares up 1%; New Zealand's NZX-50 though ended down 0.3%.
In currency markets, the U.S. dollar was little changed against the Japanese yen, at Y92.84 from Y93.00 late in New York on Friday; the euro was around Y118.54, from Y118.23, and at $1.2769, from $1.2713.
There was little movement either in Asian currencies or the Australian dollar, as the year-end approached.
"It is difficult to see markets becoming too excited this week and we expect currencies to remain largely range-bound over coming days," said analysts at Calyon.
Government bonds were mixed despite the gains in equities with lead Japanese government bond futures up 0.69 at 139.82, after touching 140.08; the bleak Japanese economic outlook was helping there with the current account surplus narrowing for the eighth straight month in October on shrinking exports, down 56.5% in the largest drop since June.
Spot gold was 1.4% higher at $765.10 a troy ounce, benefiting from some physical buying.
Nymex front-month crude was up $1.91 on Globex at $42.72 a barrel, having reached $42.98 earlier, though traders weren't expecting large gains.
-By Rosalind Mathieson, Dow Jones Newswires; +65-6415-4140; Rosalind.Mathieson@dowjones.com
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