Asian stocks miss ‘Santa Claus rally’, decline on sales

Asian stocks miss ‘Santa Claus rally’, decline on sales

Tokyo: Japanese and Chinese stocks fell back Friday in subdued trade as investors took profits, with many players in the region away for the Christmas holidays.

Investors were in a cautious mood despite fresh gains on Wall Street that lifted US stocks to fresh 2009 highs Thursday.

Tokyo shares declined for the first day in four as investors locked in gains a day after the market hit a three-month high. Chinese shares were pressured by concerns of possible policy tightening measures, dealers said.

Markets in Australia, Hong Kong, India, Indonesia, Malaysia, New Zealand, Singapore and South Korea were closed for a public holiday.

The Tokyo Stock Exchange’s benchmark Nikkei-225 index fell 42.21 points to 10,494.71. The latest reports on Asia’s largest economy, showing a rise in the jobless rate and stubborn deflation, injected a note of caution into the market as the year-end approaches.

Turnover was thin at only about 1.2 billion shares, the lowest level for a full trading day in 2009, with many investors away for holidays.

“The market gained quite sharply recently, so it was time for a break," Daiwa Securities SMBC market analyst Yumi Nishimura told Dow Jones Newswires.

The dollar’s firmness against the yen limited the market’s downside, however, dealers said. A weaker yen raises competitiveness of Japanese products overseas and boosts repatriated earnings.

“Whether the Nikkei can test further upside beyond 10,500 in coming sessions is mostly up to dollar-yen movements," said Meiwa Securities senior market analyst Masayoshi Yano.

The Shanghai Composite Index dropped 12.06 points to 3,141.35 on thin trading volume.

“The shrinking turnover shows investors are cautious and have little interest in trading before market liquidity returns to abundant levels," said Li Xianming, an analyst at Ping An Securities.

Worries are growing that Beijing will take steps next year to cool the Chinese economy, dealers said. “There are concerns Beijing may take measures early next year, such as raising the reserve requirement ratio to counter inflationary pressure," said Capital Securities analyst Jacky Zhang.

Banks and property developers led the losses. China Merchants Bank fell 1.7% to 16.40 yuan (Rs112.35), Industrial and Commercial Bank of China shed 0.39% to 5.14 yuan while China Vanke lost 0.6% to 13.22 yuan.

However, steel makers rose on hopes for further mergers in the sector after China announced plans to consolidate several iron and steel smelters to create one globally competitive company and two or three domestic leaders.

The weighted index in Taipei rose 9.05 points to 7,972.59. Profit-taking reduced early gains sparked by Wall Street reaching a 2009 high overnight, dealers said.

“It was no surprise that the pressure pulled the index back to some extent," Taiwan International Securities analyst Michael Chiang said, attributing the decline to technical factors.

In fact, market sentiment has improved after US jobless benefit claims fell to a 15-month low, Chiang said. “Optimism towards global economic fundamentals is gathering steam. I think the market will continue to go higher after digesting the pressure around 8,000 points," he said.

The Stock Exchange of Thailand composite index rose 3.20 points to close at 730.41. Trading was sluggish with most market participants absent, said Sukit Udomsirikul, an analyst at Siam City Securities.

Among market bluechips coal producer Banpu rose 4.00 baht (Rs5.59) to close at 576.00 baht, Bangkok Bank was up 0.50 baht to 116.50 baht and Kasikornbank edged up 0.25 baht to 85.00 baht.

PTT Plc gained 3.00 baht to close at 241.00 baht, and its subsidiary PTT Exploration and Production rose 1.50 baht to 145.00 baht and Siam Cement rose 2.00 baht to 236.00.