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UPDATE: Asian Shares Mixed; Miners Buoyant As Gold Rallies

(Adds information, quotes, updates/adds market levels)

By Colin Ng and Matthew Allen

Of DOW JONES NEWSWIRES

SINGAPORE (Dow Jones)--Asian stock markets were mixed, but trading in tight ranges Monday, as investors looked for fresh direction. In Hong Kong, Taifook was higher after Haitong Securities announced it was buying a majority stake in the brokerage while miners in the region were buoyant on surging gold prices.

Regional markets were unable to gain traction after mild losses on Wall Street Friday.

Australia's S&P/ASX 200 was up 0.6%, South Korea's Kospi Composite was down 0.2%, Hong Kong's Hang Seng index was up 0.4%, the Shanghai Composite index was 0.1% higher and Taiwan shares were up 0.1%. Japanese markets were closed for Labor Thanksgiving Day. Dow Jones Industrial Average futures were 36 points higher in screen trade.

In Sydney, materials, consumer staples and utilities stocks were leading the market higher, while financials and energy stocks were underperforming. "I think the market wants to go higher," said Southern Cross Equities director Charlie Aitken. "People don't want to take money out of the market, and the big miners are really starting to break out. But it's a stock picker's market and it will be held back by underperformance in banks."

BHP Billiton was up 0.5% and Rio Tinto gained 2.4%. Newcrest Mining rose 3.2% following a fresh record high for spot gold. National Australia Bank was leading banks lower, down 1.6%.

James Hardie Industries, the largest maker of U.S. home siding, surged 6.5% after the company posted stronger-than-expected second-quarter net operating profit of US$37.6 million.

In Hong Kong Taifook Securities Group was up 1.7% after resuming trade, following news Haitong Securities was buying a 52.86% stake in the brokerage from NWS Holdings for HK$1.82 billion, or HK$4.88 per share.

KGI's Ben Kwong said Taifook's stock was gaining on confirmation of the deal, despite the acquisition price coming in lower than the expected price of HK$5.00 per share. "I think expectations over a possible general offer from Haitong are supporting shares of Taifook," said Kwong.

The broader market was, however, steady in cautious trade after the benchmark index hit a 16-month high on Wednesday. "There is nothing happening to catch investors' attention. I believe the index will remain in narrow range in the near term, as any consolidation pressure is expected to be cushioned by ample liquidity in the market," Kwong said. Hong Kong-listed gold plays were higher, tracking the yellow metal's buoyant price. Zijin Mining was up 4.0%, Zhaojin Mining was up 3.1%.

China shares were little changed as investors remained cautious ahead of China's annual economic planning meeting at the end of this month.

"The market still has upward momentum as there's expectation that Beijing won't likely launch any monetary tightening measures by the year end," said Guosen Securities analyst Wang Junqing.

Anhui Conch Cement was up 4.1%, China State Construction was 0.4% higher.

In Seoul, Korea Exchange Bank was 1.7% higher and Hana Financial rose 0.9% after Hana Financial Group Chairman Kim Seung-yu said Sunday it was interested in acquiring Korea Exchange Bank.

"But investors are cautious...stocks' valuations look less attractive after the Kospi broke above 1600 last week," said Min Sang-il at E*Trade Securities.

"Investors will likely remain cautious until they confirm U.S. sales results after Black Friday," he said, referring to the traditional start of the holiday shopping season, falling on Nov. 27 this year.

Elsewhere in the region, New Zealand's NZX-50 was down 0.1%, Singapore's STI was up 0.5%, Malaysia's KLCI was down 0.2 and Philippines shares were 0.4% lower.

In foreign exchange markets, the euro was higher against the dollar and yen, at $1.4936 from $1.4851 in late New York trade Friday and Y132.78 from Y132.26, helped by gold's gains and general bearish dollar sentiment. The U.S. dollar was at Y88.88 from Y89.00.

Some traders said the U.S. dollar may come under pressure on comments by Federal Reserve Bank of St. Louis President James Bullard that he would prefer to keep the central bank's asset buying program active beyond its current cut off date.

In an interview with Dow Jones Newswires Sunday, Bullard said he wants to see the central bank effort to buy mortgage-backed securities maintained beyond the end of the first quarter of 2010.

Barclays Capital analysts said Bullard's comments suggest "that the Fed will continue to underwrite the rally in risk and would leave the USD drowning in liquidity," while minutes of the Fed's policy meeting should also be supportive of further U.S. dollar weakness.

Spot gold jumped to a fresh record high of $1,164.70 per troy ounce, up $13.80 from Friday's New York close. The rally began within minutes of the market opening, taking traders by surprise, as the dollar -- usually a key driver for the yellow metal -- had not moved. That set off stop-loss buy orders, which sent gold even higher.

"This looks like a manipulative move. Someone picks a low-volume time in the market to move the price to force people to buy in a panic," said Jonathan Barratt, managing director at Commodity Broking Services.

Nymex crude oil for January delivery was at $78.13 per barrel, up 66 cents from the New York closed.

-By Colin Ng, Dow Jones Newswires; +65-6415-4140; colin.ng@dowjones.com

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(END) Dow Jones Newswires

November 22, 2009 23:05 ET (04:05 GMT)


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