WSJ: Asian Shares End Higher; Exporters Lead Tokyo Market
SINGAPORE (Dow Jones)--Asian stock markets ended higher Monday as investors took heart from Wall Street's strong performance on Friday, with exporters and resource stocks leading the Tokyo market higher.
"U.S. economic data has been meeting expectations in September, easing worries about a global economic double dip considerably," said Hyundai Securities analyst Bae Sung-young.
Japan's Nikkei Stock Average climbed 1.4%, Australia's S&P/ASX 200 rose 1.6%, South Korea's Kospi finished 0.8% higher and India's Sensex was up 0.4%.
China's Shanghai Composite Index gained 1.4%, Hong Kong's Hang Seng Index advanced 1.0% and Taiwanese stocks inched up 0.3%. Dow Jones Industrial Average futures were up 29 points in screen trade.
Tokyo stocks rose for the first time in four days as exporter shares gained on hopes the yen might weaken after the Kyodo news service reported that Prime Minister Naoto Kan is likely to instruct his cabinet to draw up an extra budget for the current financial year. Canon climbed 2.5%, Fanuc gained 3.2% and Honda Motor rose 2.9%.
"There is a possibility that the BOJ will make a move (for monetary easing) during next month's policy meeting," which could temporarily weaken the yen, said Okasan Securities strategist Hideyuki Ishiguro.
The overall gains were curbed by steep losses in consumer lending stocks, with Aiful down 22% and Acom 10% lower after the Nikkei reported that Takefuji may file for bankruptcy protection as refunds for interest overpayments by borrowers exact a steep toll on its finances.
Although a trading halt in Takefuji shares was lifted late in the afternoon session, no trading took place as sellers far exceeded buyers. There were no takers for the shares that were being offered at Y166.00, compared with the stock's last traded price of Y171.00.
"There is a very high possibility that claims for interest repayments will increase at a much faster pace (due to bankruptcy fears)," which will likely require consumer lending firms to put aside more reserves and raise more money, said Naoki Fujiwara, fund manager at Shinkin Asset Management.
Resource shares were broadly higher across the region in the wake of higher commodity prices Friday. Inpex climbed 2.4% in Tokyo, BHP Billiton advanced 1.6% and Rio Tinto added 2.1% in Sydney and Hindalco Industries jumped 4.2% in Mumbai trading. PetroChina Co. added 1.3% and Aluminum Corp. of China, or Chalco, gained 2.5% in Hong Kong; in Shanghai, Chalco rose 2.8%, Jiangxi Copper jumped 5.2% and Xiamen Tungsten surged 8.5%.
In Hong Kong, HSBC Holdings rose 1.2% after the bank Friday confirmed that Chief Financial Officer Douglas Flint will succeed Stephen Green as group chairman. The news ends a power struggle that saw Michael Geoghegan replaced by head of investment banking Stuart Gulliver as chief executive, after Mr. Geoghegan was passed up for promotion to the job of chairman, according to a person familiar with the matter.
Some property developers in China fell after Beijing announced its latest measures to curb the nation's hot property market. China Vanke fell 0.4% in Shenzhen. In Hong Kong, China Overseas Land & Investment fell 0.5% and Beijing North Star declined 0.9%.
The government said it has banned companies that failed to develop land more than a year after winning sites via auctions from bidding for more land. Furthermore, cities that haven't met the central government's public housing requirement will be barred from offering land for luxury housing.
The new measures were "not harsh," but they do send a strong signal to developers that if the property market re-heats, more stringent action is likely to come, said Tu Chunhui at China Development Bank Securities.
In Sydney, Wesfarmers rose 2.9% after the company said it will invest more than A$600 million in its Bunnings hardware store chain in New South Wales state.
Nufarm shares rose 1.2% as trading resumed after the company said it has secured waivers on some banking covenants and that its lenders have also agreed to provide a lending facility to the company through mid-December. Trading was halted earlier, pending an announcement on its financing arrangements. In July, the agrichemical company breached two of its debt covenants with its banking syndicate.
In Seoul, Hyundai Engineering climbed 4.9% on expectations of a bidding war between Hyundai Motor Group and Hyundai Group for a controlling stake in the firm. Hyundai Merchant Marine and Hyundai Elevator both soared 15% on hopes they may be subject to a mergers-and-acquisition battle, depending on who winds up with the Hyundai Engineering stake.
Kia Motors climbed 1.5%, while Hyundai Motor erased early losses to end flat, despite news from the weekend that it will recall some 140,000 Sonata sedans in the U.S. due to steering problems.
Elsewhere in the region, New Zealand's NZX 50 rose 0.9% and Philippine stocks added 1.1%. Singapore's Straits Times Index gained 0.7%, Indonesian shares added 2.1% and Thailand's SET Index tacked on 1.1%.
In foreign-exchange markets, the euro was at $1.3444 against the dollar from $1.3493 late Friday in New York, and at Y113.21 from Y113.70. The dollar was buying Y84.19 compared with Y84.28.
Bank of Japan Gov. Masaaki Shirakawa said Monday that the central bank will look into the impact of the yen's rise on the nation's economy at a policy board meeting next week, reiterating that the bank will take appropriate steps if necessary.
"Intervention risk remains high...the market will use periods of global risk aversion to drive (dollar/yen) lower to test for any 'line-in-the-sand' levels," RBC Capital Markets said in a note to clients.
Lead December Japanese government bond futures were down 0.05 at 142.83 points, while the yield on the 10-year cash JGB was flat at 0.995%.
Spot gold was at $1,297.50 per troy ounce, up 50 cents from Friday's New York close. November Nymex crude-oil futures were up 35 cents at $76.84 per barrel on Globex.
