INO.com News - Asian Markets Extend Gains As Dubai Fear Wanes (rtt)

Asian Markets Extend Gains As Dubai Fear Wanes

(RTTNews) - The markets across Asia extended gains for the second successive day after fears of the Dubai financial crisis eased substantially with Dubai World having initiated restructuring talks with major banks. The Reserve Bank of Australia increased interest rates for the third time to 3.75% and BOJ held an emergency meeting to discuss policy issues driving the yen weaker and lifting the stocks.

In Japan, the benchmark Nikkei 225 Index gained 226.65 points, or 2.43% to 9,572, while the broader Topix index of all First Section issues advanced 2.1%, to 858/.

On the economic front, the Policy Board of the Bank of Japan unanimously decided to hold its key interest rate unchanged at 0.1% in an unscheduled monetary policy meeting. The central bank also decided to further enhance easy monetary conditions by introducing a new fund-supplying operation to encourage a further decline in longer-term interest rates. It decided to lend commercial banks three-month funds at 0.1% fixed-rate.

Stocks advanced as the local currency weakened amid expectations of policy announcements in an unscheduled meeting of the central bank.

Banking stocks ended in positive territory. Mitsubishi UFJ Financial gained 3.11%, Mizuho Financial advanced 1.85%, Resona Holdings surged up 4.33% and Sumitomo Mitsui Financial rose 1.58%.

Brokerage houses also ended higher. Nomura Holdings climbed 4.02% and Daiwa Securities Group rose 4.73%.

Automotive stocks also ended in positive territory on weaker yen. Toyota Motor gained 2.33%, Honda Motor climbed 3.89%, Mitsubishi Motor surged up 4.27%, Nissan Motor rose 3.04% and Suzuki Motor increased 3.66%.

Mixed trading was witnessed among the shipping sources. While Kawasaki Kisen Kaisha managed to add 0.40%, Mitsui OSK Lines edged down 0.21% and Nippon Yusen lost 2.97% on huge volume.

In Australia, the benchmark S&P/ASX200 Index advanced 17.70 points, or 0.38% to close at 4,719, while the All-Ordinaries Index ended at 4,733, representing a gain of 17.60 points, or 0.37%.

On the economic front, the Australian central bank hiked its key interest rate for a third straight session in a row. The Reserve Bank of Australia's Board led by Governor Glenn Stevens raised the overnight cash rate by 25 basis points to 3.75%, in line with expectations. In a statement following the announcement, Stevens said, "With the risk of serious economic contraction in Australia having passed, the Board has moved at recent meetings to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker."

A report released by the Australian Bureau of Statistics revealed that the total number of building consents issued for houses and apartments in the country during October declined a seasonally adjusted 0.6% from September. The data further revealed that year-over-year, the consents increased 11.7% to 12,814.

Results compiled by the Australia Industry Group and PriceWaterhouseCoopers revealed that manufacturing activity continued to expand in November, but at a slightly slower pace than the previous month. The Performance of Manufacturing Index registered a reading of 51.2 for November, down 0.5% from the previous month.

Mixed trading was witnessed among the bank stocks as markets shrugged off the anticipated interest rate hike by the RBA.

Commonwealth Bank of Australia gained 1.99% and Westpac Banking Corp. edged up 0.17%. However, ANZ Bank slipped 0.81% and National Australia Bank edged down 0.24%. Investment banker Macquarie Group ended in positive territory with a gain of 1.04%.

Mixed trading was also witnessed among the mining and metal stocks. BHP Billiton added 0.10% and Fortescue Metals rose 1.43%. However, Rio Tinto slipped 0.36%, Gindalbie Metals shed 1.62%, Iluka Resources fell 1.95%, Mincor Resources lost 1.02% and Oz Minerals declined 2.05%.

Among oil stocks, Woodside Petroleum gained 1.13%, Santos rose 1.49% and Oil Search Ltd climbed 2.98%. However, Origin Energy bucked the trend and ended in negative territory with a loss of 0.38%.

In Hong Kong, the Hang Seng Index extended gains for the second day with a gain of 291.65 points, or 1.34% and closed at 22,113, as the concerns about the Dubai financial crises eased further after Dubai World announced that it is holding negotiations with major banks to restructure the $26 billion debt. Strong trading in other markets, weakening of the Japanese yen, rising of interest rates for the third successive time by the Reserve Bank of Australia and higher crude and commodity prices lifted the market sentiment. Of the 42 components in the index, 39 stocks ended in positive territory amid average volumes, led by banks and china-related companies.

In South Korea, the KOSPI Index ended in positive territory with a gain of 14.12 points, or 0.91% at 1,570, as institutional investors, both domestic and foreign, evinced fresh buying interest in select blue-chip stocks following easing of fears related to Dubai financial crisis. Banks, technology stocks led the gains as optimism about sustaining recovery prospects increased after Dubai World said it has commenced talks with major banks to restructure its $26 billion debt.

Positive global cues, robust November sales from leading auto makers and increased investor confidence on account of Monday's better-than-expected GDP data lifted the Indian market sharply higher for a second straight day on Tuesday. Investors, meanwhile, shrugged of uninspiring reports on exports and manufacturing. The BSE Sensex closed at 17,198, up 272 points or 1.61% and the S&P CNX Nifty rose 89 points or 1.77% to 5,122.

Among other major markets in the region, China's Shanghai Composite Index gained 40.06 points or 1.25% to close at 3,235, Indonesia's Jakarta Composite Index added 36.66 points, or 1.52% to close at 2,452, Taiwan's Weighted Index climbed 0.88%, or 67.02 points, to close at 7,649, and Singapore's Strait Times Index rose 38.83 points, or 1.42%, to 2,771.

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