Japan recession confirmed; Singapore, Indonesia, Malaysia up after a holiday
HONG KONG (MarketWatch) -- Most Asian markets advanced Tuesday in the wake of an overnight rally on Wall Street, although some came off their early highs as investors locked in profits following a surge in the previous session.
Hong Kong shares wavered between gains and losses a day after the benchmark index soared more than 8%, while exporters such as Nintendo Co. and Isuzu Motors jumped in Tokyo even as official data confirmed a recession in Japan.
Singaporean, Indonesian and Malaysian markets rose sharply, catching up with the rest of the region, as trading resumed after Monday's holiday. Indian and Pakistani markets were closed Tuesday for a religious festival.
Y.K. Chan, strategist at Phillip Capital Management in Hong Kong, said managers at funds that were underperforming the broad market could be pressured to buy shares before the end of the year.
"If the market maintains the uptrend, I think most of the institutional investors will have to gear up. Otherwise, they'll be lagging behind other competitors and counterparts," Chan said.
In Tokyo, the Nikkei 225 Average, which surged 5.2% Monday, rose as much as 2.1% in early trading, before giving up most of the gains. The Nikkei was up 0.2% at 8,343.52 in the afternoon, while the broader Topix index added 0.2% to 813.41. Both benchmarks briefly dipped into the red in the afternoon.
Earlier Tuesday, official data showed that Japan's gross domestic product decreased by a price-adjusted 0.5% during the July-to-September period from the previous quarter, or 1.8% in annualized terms. The decline was bigger than the 0.1% quarter-on-quarter drop in preliminary figures released last month.
Australia's S&P/ASX 200 index dropped 0.9% to 3,598.60, as banking shares dropped sharply after Westpac Banking Corp. launched an institutional share placement to raise A$2.5 billion ($1.65 billion).
Singapore's Straits Times Index jumped 4.2% to 1,729.45, Indonesia's JSX Composite surged 4.1% to 1,251.08 and Malaysia's KLSE Composite gained 1.6% to 851.26.
Elsewhere, Taiwan's Taiex advanced 1.2% to 4,469.94, South Korea's Kospi fell 0.6% to 1,098.46, reversing early gains, and New Zealand's NZX 50 index climbed 0.8% to 2,721.95.
Hong Kong, Shanghai
Hong Kong's Hang Seng Index, which soared 8.7% in the previous session, struggled to stay in the positive territory. The index, which moved in a range between 14,860.83 and 15,205.32, was recently at 14,946.44, down 0.7%.
The decline came even after the city's Chief Executive Donald Tsang Monday unveiled a plan to expand loan guarantees to small and medium enterprises, or SMEs, hurt by the global economic slowdown. Tsang also announced plans to create more than 60,000 jobs by speeding up civil service recruitment as well as spending on infrastructure projects.
"The loan guarantee scheme should help alleviate the tight liquidity problems encountered by some better quality SMEs," analysts at DBS Group Research wrote to clients. "However, the actual impact may be exaggerated and the effectiveness ... will depend on whether the banks would continue their tight lending criteria (as the banks still need to bear 30% of the loan risks)."
China's Shanghai Composite slid 1.1% to 2,068.20, ahead of the release this week of November data for consumer and wholesale inflation, trade balance and retail sales figures.
"Downbeat economic data for November are expected from China this week. Leaked information revealed that both exports and imports likely contracted on a year-ago basis," wrote Moody's Economy.com Economist Sherman Chan in a note.
"The decline in shipments may be attributed to the squeeze in trade finance during recent months, but the key concern remains the severe global downturn and a looming deep recession in the world's most advanced economies," Chan added.
Regional detail
Exporters led the gains in Tokyo, with Isuzu Motors rising 4.7% and Elpida Memory Inc. soaring 16.4%.
Shares of Nintendo advanced 5.5% after Reuters reported U.S. sales of the company's popular Wii gaming consoles more than doubled during the Thanksgiving holiday week compared with the year-ago period.
Mitsubishi UFJ Financial Group gained 5.4% to 453 yen ($4.87) after the banking giant priced its $400 billion yen share issue at 417 yen apiece.
In Sydney, Commonwealth Bank of Australia slumped 8.1%, while National Australia Bank lost 6.2%. Trading in Westpac shares was halted.
The U.S. dollar bought 92.69 yen in Asian currency trading, compared with 93.04 yen late Monday.
Energy shares jumped after sharp overnight gains in crude-oil prices, with BHP Billiton climbing 4.5% in Sydney and Cnooc soared 6.3% in Hong Kong, while Inpex Holdings Inc. (JP:1605: news, chart, profile) rose 4.7% in Tokyo.
January crude-oil futures advanced 34 cents to $44.05 a barrel in electronic trading, on top of the $2.90, or 7.1%, surge to $43.71 a barrel in the regular session Monday on the New York Mercantile Exchange.
U.S. stocks extended gains overnight as investors cheered President-elect Barack Obama's pledge of massive infrastructure investment and a likely deal for the auto industry. The Dow Jones Industrial Average rose 3.5% to 8,934.18 and the Nasdaq Composite climbed 4.1% to 1,571.74, while the S&P 500 index added 3.8% to 909.70.
