Asian shares rise in thin trading on Wednesday
Asian shares extended their gains on Wednesday, December 26, 2012, with most of markets ending firmly higher in thin holiday trade despite a lack of fresh triggers, as traders snapped up stocks before the end of the year.
With only a week left before a deadline for the United States to go over a fiscal cliff, lawmakers are set to resume budget talks later this week to avoid harsh budget cuts and higher taxes for most Americans from New Year's Day. Financial markets in the U.S. and Europe were closed with only partial trading in major markets expected on Wednesday.
In the Asian region, Japan's share market led regional rally as the yen hit its lowest levels against the dollar and euro since 2011. Shanghai Composite Index ended with a 0.25% gain after a choppy, range-bound session following its 2.5% surge the previous day. Singapore's Straits Times Index was up 0.5%. South Korea's Kospi and Taiwan's Taiex lagged the region, with each closing little changed. Markets in Hong Kong, Australia and New Zealand were closed for holidays.
Back to country wise, Japan's benchmark Nikkei Stock Average closed at its highest point in nine months after the yen fell to a 20-month low on expectations of an aggressive monetary easing stance by the government of new Prime Minister Shinzo Abe. The benchmark index added 1.5% to 10,230.3 while the broader Topix index rose 1.1% to 847.7 points.
Export-related stocks rallied on expectation of improved corporate earnings after the dollar rose to the lower-85 yen range, its strongest in about one year and eight months. Japanese yen depreciated to a new 20-month low against the greenback on speculation about fresh aggressive monetary action by the Bank of Japan after the minutes from the Bank of Japan's November meeting showed a dovish tilt and some determination to drive the yen lower.
Among the winners, Panasonic Corp. rose 2.8%, Fujitsu gained 4.1%, Advantest Corp added 4.2%, and Mazda Motor Corp. advanced 3.3%. Shares of Sony Corp jumped 4% as a Nikkei news report said the firm's Chinese sales had returned to the levels seen before a territorial dispute with China triggered protests and boycotts of Japanese goods there. Japanese brokerage shares also saw strong gains on reported foreign buying. Nomura Holdings Inc. advanced 2.8%, while rival Daiwa Securities Group Inc added 2.6%.
South Korea's shares closed virtually flat today, paring gains in thin trade as some purchases made before the ex-dividend date, on Thursday, were offset by uncertainty, including questions over U.S. fiscal talks. The Korea Composite Stock Price Index inched up 0.02% to end at 1,982.2 points. Heavyweight Samsung Electronics closed down 0.3%, while SK Telecom Co., South Korea's top mobile carrier, fell 0.6%, after being fined for discriminative subsidies.
Mainland China's posted a third-straight daily gain on Wednesday, with the property sector boosted by a report outlining plans for further urbanization in the country. The benchmark Shanghai Composite index closed 0.25% higher at 2,219.13, its highest level since July 6. The measure jumped 2.5% yesterday, wiping out this year's losses. Realty stocks continued northward journey after the China's call to use urbanization as a new engine for growth. Poly Real Estate added 2% to 1310 yuan. Gemdale Corp gained 1.9% to 6.52 yuan.
The Shanghai Securities News that China's largest cities including Beijing, Shanghai and Guangzhou will limit populations under a new urbanization plan, while smaller cities and towns will loosen controls on residency. The Southern Metropolis Daily reported yesterday, citing a draft plan by the National Development and Reform Commission on urbanization, that the country will improve infrastructure and public services for transportation, communication, sewage and garbage disposal, health-care and education in urban areas, the report said. Urbanization is expected to spur 40 trillion yuan ($6.4 trillion) of investment by 2020,
India's share indices gained on tracking firm Asian cues and short covering ahead of derivatives expiry on Thursday. The Sensex rose 162.37 points or 0.84% at 19,417.46. Capital goods, metal and realty shares were among the best performers, while FMCG and IT shares lagged.
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