Asian markets cautious on US optimism, euro jitters

Asian markets cautious on US optimism, euro jitters

Hong Kong: Asian stock markets were mixed on Thursday as traders weighed upbeat US data against a potentially deepening eurozone crisis and the possibility of further steps by China to cool its economy.

Tokyo’s Nikkei index was up just 0.02% by lunch, Sydney’s S&P/ASX 200 was 0.18% higher, Hong Kong’s Hang Seng was off by 0.43% and Shanghai’s Composite Index was 0.21% lower.

Hong Kong had plunged 1.95% on Wednesday weighed by a threat by ratings agency Moody’s to downgrade Spain, in the latest sign of eurozone debt woes.

Against that bad news, markets found some support from a strengthening dollar and data showing that US industrial output rose by a robust 0.4% in November after a revised 0.2 decline in October.

“If the trend for a weaker yen becomes more explicit on the back of a recovery in US economic conditions and rise in US bond yields, we anticipate a year-end rally in stocks," Masayoshi Yano, senior market analyst at Meiwa Securities, told Dow Jones Newswires.

In Tokyo, exporter stocks such as Canon, Toshiba, Hitachi, Toyota and Honda all rose, helped by a weaker yen, although Panasonic and Sony fell.

Shanghai was in more sober mood after rallying 2.88% on Monday on relief that a widely expected interest rate rise had failed to materialise over the weekend.

Data on Saturday showed that annualised inflation had topped 5% in November for the first time in more than 2-years.

“Since the release of (the) November Consumer Price Index... and other recent data showing robust economic growth, people are worried the central bank will launch further policy tightening measures," said Zhang Zhuo, a strategist at Minsheng Securities.

The dollar maintained its upward momentum in Asia as investors welcomed the strong US economic data and rising Treasury yields, while worries about the eurozone weighed on the region’s common currency.

The dollar was at ¥84.20, nearly unchanged from 84.23 in New York, where it jumped sharply.

The euro stood at $1.3227 and ¥111.37, only slightly rebounding after plunging to $1.3211 and ¥111.27 in New York.

US stocks closed lower on Wednesday, with the Dow Jones Industrial Average falling 0.17%, the broader S&P 500 index down 0.51% and the tech-rich Nasdaq off by 0.40%.

Oil fell in Asian trade Thursday, surrendering overnight gains that had been fuelled by a huge decline in US crude inventories.

New York’s main contract, light sweet crude for January delivery, was off seven cents at $88.55 a barrel. Brent North Sea crude, also for January, fell eight cents to $92.12.

Gold opened at $1,379.00-1,380.00 an ounce in Hong Kong, down from Wednesday’s close of $1,390.00-1,391.00.