Asian Shares end Higher; Commodity Stocks Gain On Weak USD

SINGAPORE (Dow Jones)--Asian markets ended higher Friday, following overnight gains on Wall Street, with commodity-related stocks boosted by weakness in the U.S. dollar.

Hong Kong's Hang Seng Index jumped 1.6% and Japan's Nikkei 225 Average climbed 0.7%, while China's Shanghai Composite added 0.3%, taking its winning run to a sixth straight session. Australia's S&P/ASX 200 climbed 1.9% and South Korea's Kospi advanced 1.3%, with India's Sensex 0.9% higher in afternoon trading.

"It is reasonable that markets should rise because major central bankers have already given strong hints that the low interest rate environment will be maintained for a period of time," said Ben Kwong, chief operating officer at KGI Asia. "The U.S. dollar is under pressure and it's quite obvious that its weakness is driving the commodity and equity markets."

Commodity shares performed strongly, with Rio Tinto climbing 3.9%, BHP Billiton rising 2.6% and Sino Gold Mining adding 2.1% in the resources-laden Sydney stock market. Jiangxi Copper gained 2.6% and Shandong Gold-Mining rose 1.7% in Shanghai, with energy producer Cnooc jumping 3.4%.

Marine transportation stocks also climbed following recent improvement in freight rates. China Cosco Holdings gained 2.1% in Hong Kong and 1.1% in Shanghai, Neptune Orient Lines advanced 2.6% in Singapore and Hanjin Shipping Co. added 1.2% in Seoul.

After the Dow Jones Industrial Average shot up 2.1% overnight, DJIA futures were recently down 20 points ahead of the U.S. October non-farm payrolls report later.

"My suggestion to clients is that, unless U.S. stocks are on a more stable path, they should sell on rallies," said David Li, trader at Daiwa Securities SMBC-Cathay in Taiwan.

Several financial stocks advanced in the region, tracking their U.S. peers, with Commonwealth Bank of Australia rising 1.7% Westpac Banking Group gaining 2.6% in Sydney, KB Financial adding 1.7% in Seoul and Bank of Communications gaining 2.5% in Hong Kong.

In Tokyo, however, financial stocks lagged the market after a Nikkei report on the possibility of regulators imposing tighter global banking regulations sparked concerns about capital raising. Mizuho Financial Group fell 1.1% and Shinsei Bank lost 2.5%.

Still, gains in some exporters helped the Nikkei 225 finish higher. Electronics maker NEC Corp. was a bright spot, jumping 10.1% in strong volume following news of capital raising.

Toyota Motor advanced in early trade after announcing better-than-expected earnings and lifting its forecasts, but ended 1.7% lower on the yen's strength. Elpida finished up 1.8%, but well off its highs as well, on news it had signed a pact with Taiwan's ProMOS Technologies to outsource production of memory chips. ProMOS surged 6.3% higher in Taipei.

Ssangyong Motor was a standout in Seoul, jumping 14.9% before a court ruling on the company's proposed restructuring plan.

Shares of several state-owned companies jumped in Mumbai trading a day after the government approved a plan to sell minority stakes in a move aimed at raising billions of dollars to fund various social welfare programs. Rashtriya Chemicals & Fertilisers, Hindustan Copper and MMTC were among stocks that jumped 10% or more.

Among other regional markets, Singapore's Straits Times Index added 1.2%, Indonesian shares gained 1.3% and Thailand's SET Index climbed 2.1% in afternoon trading. Earlier in the day, New Zealand's NZX 50 gained 0.5% while Philippine shares dropped 0.4%.

Shares of Manila Electric Co. slumped 12.2% after First Philippine Holdings Corp. on Thursday decided to sell just half of its remaining 13.4% stake in Meralco to Metro Pacific Investments Corp., forsaking an offer from Triratna Holdings Corp. to buy the entire stake. The drop was "obviously, a sell-on-news phenomenon after the winner of the bidding war is known," said Erwin Balita, research head of SB Equities in Manila.

The U.S. dollar slipped against major currencies ahead of the U.S. payrolls data, with the euro at $1.4894 from $1.4875 late in New York, and 134.90 yen versus 135.00 yen. The U.S. dollar was at 90.53 yen, from 90.75 yen.

Barclays Capital chief currency strategist Masafumi Yamamoto said the U.S. payrolls could show a 150,000 decline in jobs -- less than the 175,000 drop tipped in a Dow Jones poll of economists -- which could push the U.S. dollar up against the Japanese yen and boost U.S. long-term interest rates and stocks.

The Australian dollar recently rose to $0.9173 after the Reserve Bank of Australia revised upwards its medium-term forecasts for inflation and economic growth and said a further gradual withdrawal of monetary stimulus would likely be needed. That announcement follows a speech Thursday by RBA Governor Glenn Stevens who said the economy had experienced only a mild downturn and spare capacity would be used up quickly.

Nymex December crude oil was recently up 33 cents at $79.95 a barrel on Globex. But Morgan Stanley said that upside for crude was limited as supportive macroeconomic factors are beginning to fade. "The deluge of global liquidity has contributed to lifting oil prices since February...with the end of easing approaching, we envision a harder grind ahead - one where fundamentals will matter more."

Spot gold was at $1,091.70 per troy ounce, up $2.20 versus the New York close.

Lead December Japanese government bond futures were slightly lower as the Nikkei rose, with the contract down 0.04 point at 137.56.

-Dow Jones Newswires; +65-6415-4140; markettalk@dowjones.com

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November 06, 2009 04:35 ET (09:35 GMT)


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