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Nikkei Climbs 19% in 2009; Yen, Stimulus Help

Japan's Nikkei average booked a 19 percent gain in 2009, with shares of high-tech exporters leading a rebound rally on a weaker yen and as economic stimulus measures helped turn around the world economy.

The benchmark's yearly climb followed a 42 percent plunge -- the biggest loss in its 58-year history -- last year when investors saw the global financial crisis take a heavy toll on
risky assets including stocks.

On the Tokyo stock market's final trading day of the year on Wednesday, the Nikkei ended down 0.9 percent, dragged lower by bankruptcy worries about Japan Airlines (JAL).

Transport Minister Seiji Maehara said cabinet ministers would meet at 6 p.m. (0900 GMT) on Wednesday to discuss JAL.

In moderate trade, the benchmark Nikkei closed at 10,546.44 after earlier rising to 10,707.51, its highest since Aug. 31. It has clawed back about 50 percent since hitting a
26-year closing low in March.

Some 1.7 billion shares changed hands on the Tokyo exchange's first section, in line with last week's daily average.

Declining stocks outnumbered advancing ones by nearly 4 to 1.

In one encouraging technical sign for the Nikkei, its 25-day moving average edged above its 75-day moving average, a phenomenon known as the "Golden Cross" that can often indicate
further rises and is regarded as a buying signal.

Japanese financial markets will be closed on Thursday and Friday for the New Year's holiday.

Honda Motor dropped 1 percent to 3,110 yen after eking out some gains at one stage.

But Hitachi advanced 3.7 percent to 284 yen after Japan's biggest electronics firm by sales said it is considering selling some of its operations as it tries to return to profit.

High-tech exporters led gains in the Japanese market in 2009, while banking shares lagged behind, hurt by worries about equity financing as well as the growing fear that JAL might go bankrupt.

Market analysts say the big banks have been hit by a combination of concern about JAL and worry that Mizuho and SMFG might be forced into equity fundraisings early next year.

Seoul shares reversed earlier losses to end 0.6 percent higher on the year's last trading day, posting a 50 percent gain in 2009, but losses in Kumho Asiana Group shares weighed.

The Korea Composite Stock Price Index (KOSPI) finished up 10.29 points at 1,682.77 points, compared with 2008's close of 1,124.47 points.

"Markets are fairly calm given the negative news concerning credit risks at firms like Kumho Asiana Group. Foreign investors are steadily buying," said Lee Kyoung-su, a market analyst at
Taurus Investment & Securities.

Foreign investors were buyers of a net 193.4 billion won worth of stocks, picking up a total of 32.4 trillion won ($26.70 billion) worth in 2009.

Analysts were cautiously bullish about the 2010 stock market outlook.

Losses in Kumho Asiana Group-related issues weighed on the index amid deepening fears about the group's financial health.

The Maeil Business Newspaper reported on Wednesday that Kumho Asiana Group and its creditors held talks on possible debt restructuring for Kumho Industrial and Kumho Tire.

Shares in Kumho Tire and Kumho Industrial both tumbled by daily limit of 15 percent.

Asiana Airlines, also a unit of Kumho Asiana Group, was down 6.9 percent.

Banking issues also retreated on fears of fallout from the Kumho issue.

Woori Finance ended down 4.15 percent and Hana Financial Group declined 1.64 percent.

The broader banking index slipped 0.37 percent.

Exporters also gained as investors looked toward their fourth quarter earnings and next year's prospects.

Shares in Samsung Electronics rose 1.65 percent and LG Electronics went up 1.67 percent.

China's key stock index closed up 1.58 percent, led by energy giants riding the global oil price rally, while brightened prospects for China's stock market strengthened typical year-end
"window-dressing" buying by institutional investors.

The benchmark Shanghai Composite Index finished at a two-week
closing high of 3,262.600 points, extending a 2-plus percent gain earlier in the week fuelled partly by a government pledge to stick with its economic stimulus.

Investors focused on Wednesday on economy-sensitive index heavyweights.

Asia's top refinery Sinopec closed up 3.14 percent at 14.14 yuan while China's top oil firm PetroChina added 1.92 percent to 13.81 yuan.

In Shanghai, losing A shares outnumbered gainers by 497 to 364 as investors mainly traded large-caps, pushing turnover to jump to 157 billion yuan ($23 billion) from Tuesday's 117 billion yuan.

Traders said Wednesday's market gain was also propelled by institutional investors' "window-dressing" buying to bolster their year-end performance.

Australian stocks fell 0.2 percent, snapping a four-day rally that took the leading index to a 10-week high, as energy and metals stocks fell in step with commodities prices.

The benchmark S&P/ASX 200 index lost 11.8 points to 4,833.3 points, based on the latest available data, after rising 4.5 percent in the previous four trading days.

The index is up about 30 percent in 2009, recovering from last year's 41 percent slide.

Newcrest Mining, Australia's biggest gold miner, slipped 0.9 percent to A$34.96 and smaller rival Lihir Gold dropped 0.6 percent to A$3.25.

Woodside Petroleum shed 0.6 percent to A$47.35 and Santos fell 0.6 percent to A$14.00.

Farm chemicals maker Nufarm ended flat at A$10.87 after rating agency Standard & Poor's kept its long-term corporate credit rating at CreditWatch with negative implications.

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