Trading Room home page

Asian markets mixed after weak US data

Market watch top headlines

World reports

Stocks to watch

API, DSH, FLT, NAB, STO, WPL,

HONG KONG, Dec 4 AFP

December 04 2012, 10:55PM

Asian markets have closed mixed following weak US manufacturing data and fears over US talks aimed at averting the fiscal cliff.

The euro touched a six-week high against the dollar at one point on Tuesday, helped by news Greece had begun a debt-buyback program and eurozone finance ministers had nodded through a bailout for Spain's troubled banks.

Tokyo fell 0.27 per cent, or 25.72 points, to 9,432.46, Sydney eased 0.62 per cent, or 27.9 points, to 4503.6 and Seoul lost 0.25 per cent, or 4.84 points, to close at 1,935.18.

Hong Kong was 0.15 per cent higher, adding 32.12 points to end at 21,799.97 while Shanghai was up 0.78 per cent, or 15.37 points, at 1,975.14.

Both markets rebounded after posting heavy losses the previous day.

US shares turned down on Monday after the Institute for Supply Management (ISM) said its index on manufacturing activity for November showed contraction following two months of expansion.

The purchasing managers index (PMI) fell to 49.5, below the 50 breakeven level, from 51.7 in October.

Businesses surveyed by the ISM blamed the slow global economy and uncertainty over the fiscal cliff battle in Washington. It followed positive manufacturing numbers across Asia, while Europe also saw a marginal improvement.

The Dow slid 0.46 per cent, the S&P 500 fell 0.47 per cent and the Nasdaq shed 0.27 per cent.

US politicians have until the end of the month to agree a deal on cutting the country's huge deficit and avoid the fiscal cliff of huge tax hikes and spending cuts widely expected to tip the economy into recession if they take effect.

However, there has been little progress, with Republicans and Democrats blaming each other for the stalemate.

On Monday the Republicans put forward a proposal to the White House that calls for $US800 billion ($A770 billion) in increased tax revenue, half of what President Barack Obama has proposed, while it also includes huge cuts to Medicare and other programs. The plan was immediately rejected.

In Europe, Greece began its program to buy back privately held debt at a big discount, the underlying condition for it to receive its next tranche of bailout funds from the European Union and International Monetary Fund.

Eurozone finance ministers also gave the green light to a 39.5 billion euros ($A50 billion) recapitalisation of Spain's banks next week.

A preliminary plan for a bailout for Cyprus worth 17 billion euros was also drawn up.

The euro climbed at one point to $US1.3081 - its highest since October 22 - before easing slightly to $US1.3074, while it also bought Y107.21 in early European trade, compared with $US1.3051 and Y107.36 in New York late on Monday.

The dollar was slightly lower at Y82.02 from Y82.24.

The Australian dollar rose to US$1.0454 from the $US1.0421 seen just before the central bank cut interest rates by 25 basis points to three per cent citing problems in the global economy, in particular Europe and the United States.

Oil prices eased, with New York's main contract, light sweet crude for delivery in January, down 43 cents to $US88.66 a barrel in the afternoon and Brent North Sea crude for January shedding 53 cents to $US110.39.

Gold was at $1,705.44 at 1055 GMT (2155 AEDT) compared with $US1,717.75 late on Monday.

In other markets:

- Singapore's Straits Times Index closed down 0.12 per cent, or 3.62 points to 3,062.12.

Olam International gained 1.59 per cent to Sg$1.60 and Singapore Telecommunications added 0.61 per cent to Sg$3.31.

- Wellington fell 0.82 per cent, or 33.40 points, to 4,015.69.

Fletcher Building was off 0.88 per cent at NZ$7.91 and Telecom ended down 1.94 per cent at NZ$2.28.

- Manila closed 0.59 per cent higher, adding 33.58 points to 5,706.28.

SM Prime Holdings gained 2.72 per cent to 16.60 pesos while BDO Unibank rose 1.34 per cent to 72 pesos. Empire East Landholdings was unchanged at 1.03 pesos.

- Taipei was flat, edging up 1.07 points to 7,600.98.

Smartphone maker HTC rose 4.53 per cent to Tw$278.5 while chip giant TSMC fell 1.34 per cent to Tw$96.6.

- Kuala Lumpur shares edged up 0.26 points or 0.02 per cent to close at 1607.61.

British American Tobacco gained two per cent to 56.62 ringgit while Petronas Chemicals Group rose 1.2 per cent to 5.73. UEM Land Holdings lost 2.4 per cent to close at 2.08 ringgit.

- Jakarta ended down 32.79 points, or 0.76 per cent, to 4,269.65.

Lender BCA fell 7.9 per cent to 8,750 rupiah, car maker Astra International slipped 4.17 per cent to 6,900 rupiah, while cigarette maker Gudang Garam climbed 0.19 per cent to 53,850 rupiah.

- Mumbai's Sensex index rose 0.22 per cent or 42.80 points to 19,348.12 points.

Mahindra & Mahindra was down 1.75 per cent at 938.95 rupees and Tata Power was up 4.0 per cent at 111.75 rupees.

- Bangkok edged down 2.86 points or 0.21 per cent to close at 1,330.06.

Coal producer Banpu lost 1.28 per cent to 387.00 baht while energy giant PTT Plc gained 0.62 per cent to 327.00 baht.

By Danny McCord