Asian Shares Up A Tad In Thin Trade; Australian Gold Stks Up

By Shri Navaratnam

Of DOW JONES NEWSWIRES

SINGAPORE (Dow Jones)--Asian share markets were slightly higher Tuesday in subdued trade as a holiday in Japan kept markets range-bound, with gold stocks leading the way in Australia after gains for the yellow metal.

Australia's S&P/ASX 200 up 0.3% and South Korea's Kospi Composite rose 0.3%, while New Zealand's NZX-50 was up 0.1%. The Dow Jones Industrial Average futures contract was up 30 points in screen trade, following the DJIA's 0.8% rise Monday.

Australian shares were thinly traded as many traders were away for the Melbourne Cup horse race, with the state of Victoria on holiday. Most sectors were trading up though blue-chips were slightly down, including BHP Billiton, off 0.3%, and Westfield, down 0.7%.

Sydney investors remained cautious. "We are seeing bigger volume and therefore more conviction on down days than up days lately, in conjunction with increasing short selling," said Wesley Legrand at Grand Private Equities said. "But today is Melbourne Cup day, so it's very quiet."

Gold stocks were the only standouts, with Newcrest rising 2.5% and Lihir up 2.0% after gold prices jumped Monday.

The yellow metal was trading up after the International Monetary Fund said it had sold 200 metric tons of gold to India's central bank. It was trading at $1,061.50 a troy ounce, up $1.90 from the New York close.

Westpac senior commodity analyst Justin Smirk in Sydney said the IMF sales add to the broader story of Asian central banks seeking to diversify their U.S. dollar holdings. "The diversification has been an ongoing story for Asian central banks. Gold holdings in comparison to dollar holdings are low...This story is one of evolution, not revolution," he said.

Australia's largest department store chain Myer Holdings, which Monday debuted at a deep discount to the A$4.10 a share price investors paid in the group's initial public offering, managed a modest rebound. Its shares were up 2.2%.

In South Korea, stocks in automobile and technology sectors lifted the market although banks remained weak on ongoing concerns following U.S. lender CIT Group's filing for bankruptcy protection over the weekend.

"Despite the better-than-expected U.S. ISM manufacturing data, the Kospi is not rising as much as expected, indicating weak sentiment," said Hwang Bin-ah at Kyobo Securities in Seoul.

Samsung Electronics was up 0.7% and Hyundai Motor tacked on 2.0%, while KB Financial dropped 1.4% and Shinhan Financial lost 1.3%.

In New Zealand, shares were up a touch with much of the interest centered on utilities investor Infratil. The company said it was in a consortium with NZ Superannuation Fund, which was in exclusive talks to buy some, or the bulk, of Shell New Zealand's downstream assets, valued in 2007 at NZ$2.9 billion, including a 17.1% stake in New Zealand Refining.

Infratil was down 1.2%. Forsyth Barr broker David Price said the market was unenthusiastic about the deal; "We don't know enough about it -- what's in the deal, how they are going to fund it. There are no synergy benefits. People have received it not that favorably and they need more information."

NZ Refining shares, which have been rising on expectation of a sale of the Shell stake, was up 0.6%.

In currency markets, riskier currencies gained as attention shifted to central bank policy decisions, led by the Reserve Bank of Australia later Tuesday and the Federal Reserve which begins its two-day meeting later in the global day.

The euro was higher at $1.4801 from $1.4768 in New York, and was up against the yen at Y133.81 from Y133.44. The single currency was helped by the IMF's sale of gold to India's central bank, though the news was "not overly significant," said Phil Burke, Senior Foreign Exchange Trader at JPMorgan in Sydney. He noted that the theme of central bank diversification away from the greenback was an old one, but still enough to give the dollar a slap in thin Asia markets.

The U.S. dollar was steady against the Japanese yen around Y90.40 from Y90.35 in New York.

The Australian dollar was up at US$0.9076 as the market there awaited a widely anticipated 25-basis-point interest rate hike to 3.50% later in the day. Market attention will then turn to the accompanying statement by RBA Governor Glenn Stevens, as a gauge of how hawkish the RBA will be in coming months.

On the data front, New Zealand's wages growth remained weak in the third quarter as the labor market continued to be under pressure. Statistics New Zealand said ordinary-time salary and wage rates in the private sector rose 0.4% in the third quarter from the second after rising 0.3% in June quarter.

"Continued decline in wage growth reinforces that the recession is still exerting some downward pressure on inflation," said Nick Tuffley, Chief Economist at ASB in Auckland. The Reserve Bank of New Zealand will likely view the modest labor cost growth as reinforcing its view that there is no hurry to lift the cash rate until the second half of 2010, he said.

Crude oil remained mostly steady after rising $1.13 in New York on the back of improved economic data. Nymex December crude was up four cents at $78.17 a barrel on Globex.

-Shri Navaratnam, Dow Jones Newswires; +65-6415-4140; shri.navaratnam@dowjones.com

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(END) Dow Jones Newswires

November 02, 2009 20:23 ET (01:23 GMT)


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