Asian Markets Dip But Japan Manages a Gain
Asia markets were mostly lower Monday though Japan managed to finish higher, while the dollar retreated after the U.S. government's $17.4 billion of rescue loans to ailing automakers last week.
Higher-yielding currencies such as the Australian dollar gained against the yen after the Bank of Japan last week followed the U.S. Federal Reserve in cutting interest rates to nearly zero and vowing to buy troubled assets and help thaw credit markets. The dollar and yen dipped against the euro as currencies offering higher-yields benefited from the gradual reemergence of risk-taking as a brutal 2008 draws to a close. Oil futures for February contract delivery are trading around the $43 a barrel level in the Asian session.
Japan's Nikkei 225 Average finished up 1.6 percent to hit the highest close in over a month, helped by Japanese government steps to bolster an economy in recession, with investors also relieved that struggling U.S. automakers won a $17.4 billion government loan.
Seoul shares wiped out early gains to close slightly lower, with optimism about the U.S. auto rescue plan countered by profit-taking on chipmakers and banks, while expectations for new property market-supporting steps abated. Shares in Hynix Semiconductor fell 3.6 percent after a sharp rebound in the price of dynamic random access memory chips bolstered the world's No. 2 memory chipmaker and larger rival Samsung Electronics last week.
Australian shares lost 1.6 percent as miner Rio Tinto fell after announcing a 10 percent cut in iron ore output, but power generator Babcock & Brown Power jumped on receiving takeover approaches. Trading was thin with many investors away on year-end holidays, and fund managers said the share-price moves were exaggerated by light trade.
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Hong Kong shares gave up early gains to slip below 15,000 points on Monday, as HSBC Holdings slid after S&P cut its outlook on the stock to negative and properties fell as last week's rate cut-fueled rally dried up. But shares in some mainland-based Taiwanese companies dodged the downdraft after China pledged to help Taiwan firmstide over the global economic downturn. Shares in athletic footwear maker Yue Yuen Industrial, a part of the Taiwanese Pou Chen Group, surged 13.6 percent. The stock had risen more than 47 percent soon after it opened for trade.
Singapore's Straits Times Index dropped 2.8 percent with shares of Singapore Petroleum down 4.3 percent after oil prices slid 6 percent on Friday to the lowest since Feb. 2004.
Chinese stocks sank 1.5 percent, weighed down by pending expiries this week of lock-up periods for shares in dozens of listed firms, while energy companies dropped after news late last week of a fuel price cut and tax hike that analysts expect will hurt refiners' margins in short term. Sinopec, China's biggest oil refiner, dropped 3 percent while PetroChina was off 2 percent.