Asia markets mixed as Japan rallies, China traders cautious

Thursday, 9 December 2010 00:01 -     - {{hitsCtrl.values.hits}}

HONG KONG, (AFP) - Asian stock markets were mixed on Wednesday, with investors in China cautious ahead of expected policy announcements but rallies by the dollar and euro boosted Japanese stocks.

Tokyo’s Nikkei Index was up 0.69 percent in the morning, while Sydney’s S&P/ASX 200 was off by 0.44 percent, Hong Kong’s Hang Seng slipped 0.6 percent and Shanghai’s Composite was down by 0.18 percent.

Tokyo traders took heart from an announcement on Monday by US President Barack Obama and his Republican foes extending tax breaks for all income groups, including the wealthiest Americans.

“These measures will help to stimulate the US economy significantly,” Okasan Securities strategist Hideyuki Ishiguro told Dow Jones Newswires.

A weaker yen also provided support, reflecting Japan’s dependence on exports.

In Asian trade the troubled euro was changing hands at 1.3262 dollars, slightly up from 1.3258 dollars in New York late Tuesday.

The European single currency also firmed to 110.83 yen from 110.64 yen, while the dollar edged up to 83.59 yen from 83.45 yen.

Investors in China remain cautious ahead of an annual Central Economic Work Conference expected this month as well as a likely rate hike to calm inflation.

“China may raise interest rates ahead and its stance on inflation will also be key in guiding the near-term market direction,” said Louis Tse, director at Value Convergence CEF Securities in Hong Kong.

Gold miners led the downward trend among Chinese stocks as the precious metal slipped from a record-high price in London on Tuesday of 1,431.25 dollars an ounce.

Gold opened at 1,400.50-1,401.50 dollars an ounce in Hong Kong, compared with Tuesday’s Hong Kong close of 1,423.00-1,424.00 dollars.

Brazil’s Vale fell slightly on its Hong Kong trading debut as the mining giant became the the first South American firm to list on the city’s bourse in a bid to tap the massive Chinese market.

Vale’s common share depositary receipts, which mirror the miner’s stock, fell to 268 Hong Kong dollars (34.50 US dollars) in early trade after opening at 270 Hong Kong dollars.

Wall Street stocks closed mostly flat Tuesday, after trading with strong gains throughout the day, as early enthusiasm over the controversial deal to extend tax cuts was replaced by caution.

The Dow Jones Industrial Average slipped 0.03 percent, the broader S&P 500 gained 0.05 percent and the tech-rich Nasdaq climbed 0.14 percent.

Oil fell in Asian trade as traders took profits after prices reached two-year highs on Monday, analysts said.

New York’s main contract, light sweet crude for January delivery, slid 67 cents to 88.02 dollars per barrel. Brent North Sea crude for January slipped 59 cents to 90.80 dollars.

“The weaknesses we’ve had yesterday and today is just a bit of profit-taking,” said Ben Westmore, minerals and energy economist for the National Australia Bank in Melbourne.