Asia-Pacific markets end mixed on worries over the health of the euro zone
Regional markets rose in the early hour on Tuesday as investors chased for value buying following sharp fall prior day. Markets rebound were supported by view that heavy selloff in recent days turned stocks valuation at attractive level as compared their earnings prospect and on reports of agreement of the eurozone finance ministers to provide EUR150 billion in additional bilateral loans to the IMF to help debt-ridden countries also accelerated rally.
But most of gains erased before finishing the day, on tracking lower opening of the European bourses Tuesday and as of warning from ECB President Draghi about the poor economic prospect of the eurozone in 2012 due to the region's lingering debt problems.
Asia-pacific market tumbled on Monday as risk aversion triggered on fear that North Korean Leader Kim Jong Il's death would increase geopolitical tensions in East Asia, in particular the Korean peninsula. Investors are uncertain on how long would Kim Jong Un (Kim Jong Il's son) stay in power, the flee of refugee from North Korea to nearby countries including South Korea and Japan and possibility of reunification of the two Koreas, which may cause instability in the region.
Turnover across the regional markets were thin as investors reluctant to add aggressively ahead of key US economic data due later today include housing starts and building permits, which would provide more clues to the state of the US housing market and ahead of the Christmas holidays.
Back to countries, the Tokyo stockmarket closed modest higher, with the benchmark Nikkei Stock Average rose by 0.5% at 8,336.48, as investors chased for bargain hunting following steep selloff prior day.
Olympus Corp was up 16.4% to 1,065 yen despite reports that company is preparing to issue around 100 billion yen in new shares following the sharp downward revision of group net assets to reflect its true financial situation.
Mitsubishi Heavy Industries ended 1.9% up at 326 yen and IHI Corp 2.2% at 184 yen after Defense Ministry said Mitsubishi Heavy Industries and IHI would participate in building the planes. Japan's government said Tuesday it had selected Lockheed Martin's F-35 Lightning II Joint Strike Fighter as its next generation jet. The 42-plane contract for the new fighter, dubbed the FX, is expected to be worth more than $4 billion, making it Japan's most expensive fighter procurement.
The Japan Iron and Steel Federation reported on Tuesday that Crude steel output in fiscal 2011 would likely fall 4-5% from fiscal 2010 to 105-106 million tons. The federation cited the uncertain export environment as a reason for the expected decline in output amid a long-term rise in the yen, concerns about a slowdown in Asian economies, and lower crude steel demand due to strengthened output capacity in Asia. In fiscal 2010, crude steel output totaled 110.79 million tons. The steel industry group estimates output will remain in the range of 100 million tons in fiscal 2012, but will fall below the volume estimated for fiscal 2011.
In Australia, the Sydney benchmark All Ordinaries index down by 0.17% to 4,107.10, after moving in and out of the boundary line, as mounting fears over eurozone debt saga. Fall in financial and materials stocks overshadowed gains made elsewhere in the telco, energy and health care spaces. But losses were limited, thanks to the release of the minutes of RBA meeting. The RBA released minutes of its December meeting on Tuesday, revealing that Australia continues to perform well despite a likely stalling of the global economy. The RBA said the fallout from Europe's government debt crisis had been the dominating factor in its decision to cut interest rates. The RBA cut the cash rate by 25 basis points early this month, the second cut in two months, to 4.25%.
In China, the Shanghai Composite index down by 0.1% at 2,215.93, a lowest level not seen since Mar. 16, 2009, when index closed at 2,153.29, after fluctuating in narrow range between the neutral line.
Chinese market managed to finish morning tad above the line despite a weak beginning, as investors picked heavily battered stocks on hopes the central bank would cut the banks reserve requirement ratio (RRR) before the end of 2011 or during early in January to ease the capital strain after the country's yuan funds outstanding stemming from foreign exchanges dropped for a second month in November from one month ago. But morning gain stabilized in afternoon, and fluctuated in and out of the neutral line before finishing tad lower on concerns about the domestic economy. Investors remain cautious amid sign of a domestic economic slowdown, and on mounting fears over eurozone debt crisis after warning from ECB President Draghi about the poor economic prospect of the eurozone in 2012 due to the region's lingering debt problems.
In India, the Bombay Stock Exchange's Sensex erased 1.33% to 15,175.08, extending fal for fifth straight day, amid a volatile trading session, on persistent selling by foreign funds with index heavyweight Reliance Industries leading the fall. All the sectoral indices, barring in the FMCG space, ended in the red with capital goods, metals and realty leading the decline.
Among other Asian bourses, the Hong Kong Hang Seng index added 0.06% to 18,080.20. The South Korea KOSPI put on 0.91% to 1,793.06. The Taiwan TAIEX index added 0.44% at 6,662.64. Philippine PSEi gained 0.56% to 4,342.18. New Zealand NZX50 declined 0.65% to 3,202.02.. Singapore Strait Times index dropped 0.14% to 2,614.45. Malaysia KLSE fell 0.85% to 1465.17. Indonesia Jakarta Composite index was down 0.48% to 3,752.34.
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