Japan recession confirmed; Singapore, Indonesia, Malaysia up after a holiday
HONG KONG (MarketWatch) -- Most Asian markets ended higher Tuesday, overcoming selling pressure from investors keen to lock in profits after a strong run recently.
Japanese shares climbed for a second session, although data confirmed the country was in a recession, on exporters like Nintendo Co. and technology counters such as Elpida Memory, while Nomura Holdings surged on a report it plans to cut about 100 jobs in Asia.
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.
Australian stocks lost ground as financials dropped sharply after Westpac Banking Corp. launched an institutional share placement to raise A$2.5 billion ($1.65 billion), while Hong Kong shares ended lower at the end of a roller-coaster session, giving up some of the heady gains from the previous session.
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, but gave up most of the gains to end at 8,395.87, up 0.8%. The broader Topix index added 0.7% to 817.94. 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 0.8% to 3,604.30, even though trading in Westpac shares was halted, as the lender's share placement issue fanned concerns about equity dilution and worries that others might follow suit.
Singapore's Straits Times Index jumped 5.3% to 1,747.77 by late afternoon, cheering the strong Wall Street rally during the two previous sessions. Indonesia's JSX Composite gained 3.9% to 1,249.17 and Malaysia's KLSE Composite added 0.4% to 841.25 in late trading.
Elsewhere, Taiwan's Taiex advanced 1.2% to 4,472.66, South Korea's Kospi inched up 0.1% to 1,105.84 after flirting with losses through the session, and New Zealand's NZX 50 index climbed 0.9% to 2,721.95.
Hong Kong, Shanghai
Hong Kong's Hang Seng Index, which soared 8.7% in the previous session, finished 1.9% lower at 14,753.22, while the Hang Seng China Enterprises Index fell 1.7% to 8,001.74.
Kenny Tang, head of research at Redford Securities, said the decline was "a reasonable correction" after the Hang Seng rose nearly 1,200 points Monday, but increasing trading volumes reflected improving confidence.
The decline in Hong Kong 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.
