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Asia stocks sparkle after gold, banks drag on Tokyo
By V. Phani Kumar, Rosalind Mathieson & Leslie Shaffer
Last Update: 5:04 AM ET Nov 16, 2009
HONG KONG (MarketWatch) -- Asian markets ended mostly higher Monday, with another record high for gold boosting shares of miners, but Japanese shares made limited gains on concerns about potential capital raisings from banks.
Japan's Nikkei 225 Average ended up 0.2% at 9791.18, Australia's S&P/ASX 200 rose 1%, South Korea's Kospi gained 1.3%, Taiwan's Taiex advanced 1.7%, New Zealand's NZX 50 rose 0.5% and the Philippines' main index finished 0.8% lower.
Hong Kong's Hang Seng Index rose 1.7%, while China's Shanghai Composite Index jumped 2.7%, aided by economic data showing foreign direct investment into China climbed for a third straight month.
Japanese shares struggled to hold on to their gains, although official figures showed the country's third quarter economy rose at a faster-than-expected pace of 1.2% from the previous three months, on fears about equity-dilutive capital-raising. Read story on Japanese GDP growth.
"GDP is particularly important for medium- and long-term investors, but the stock market now is mostly moved by short-term players," said Tokai Tokyo Securities market analyst Seiichi Suzuki, citing concerns over short-term negatives such as dilution concerns.
Mitsubishi UFJ Financial Group MTU tumbled 5.5% after a person familiar with the matter said it was considering raising capital of one trillion yen ($11.1 billion) by issuing common shares. If the offering goes ahead, the capital boost would be one of the biggest share sales by a Japanese financial institution. The news also weighed on other financial plays, with Sumitomo Mitsui Financial Group SMFJY sliding 5.9% and Mizuho Financial Group MFG shedding 3.9%. Read about MUFG's reported capital-raising plan
Hitachi HIT slumped 8.5% on the company's plan to raise up to 415.67 billion yen from an issuance of new shares and convertible bonds to fund capital outlays and pay back its loans.
In afternoon trading, India's Sensex rose 1.4% and Singapore's Straits Times Index added 2%.
Regional markets were also helped as U.S. index futures pointed to a higher opening, with Dow Jones Industrial Average $INDU futures recently 75 points higher in screen trade.
The U.S. dollar's continued decline also spurred risk appetite, boosting equities and commodities, and pushing gold prices to a fresh high. Spot gold hit a record high of $1,133.70 a troy ounce earlier Monday, and was recently at $1,132.30, an increase of $13.80 from New York close. Read story on gold futures
That boosted gold miners, with Sino Gold Mining and Lihir Gold LIHR climbing 4.3% and 4.2%, respectively, in Sydney. In Hong Kong, Zijin Mining ZIJMF surged 6% and Zhaojin Mining ZHAOF gained 4.1%, while Shandong Gold-Mining rose 2.7% in Shanghai.
"What's good for gold is always good for Australia," said Citigroup's Graham Harman.
Taiwanese shares were helped by a 6.9% jump in shares of Chi Mei Optoelectronics CMEOF following news over the weekend that Innolux Display -- the world's largest flat-panel monitor maker -- would buy Taiwan's No. 2 flat-screen producer, in an all-share deal worth $5.3 billion. Innolux added 3%, while Chunghwa Picture Tubes jumped by the day's 7% limit on hopes it may also be an acquisition target.
"The consolidation is positive news for the LCD industry as it will help stabilize panel prices," said Capital Securities trader Diana Wu. "The merger will also help Taiwanese flat-panel makers compete against their Korean rivals," Ms. Wu said.
China's shares outperformed the region, led by gains in renewable energy plays.
"The U.S. president's visit is driving speculative funds to the renewable energy and low carbon emission sectors as the topic of climate change is put at the top of Obama's agenda during his (Nov. 15-18) visit," said Hu Jiamin at CSC International Holdings.
Mainland-listed Sichuan Chuantou Energy added 2.8% and Zhejiang Feida Environmental Science & Technology Co. jumped by the day's 10% limit. In Hong Kong, wind and solar concern Hong Kong Energy Holdings added 6.4%.
Elsewhere, AXA Asia Pacific AXAPY jumped 4% in Sydney after the Sydney Morning Herald reported AXA SA was considering adding a sweetener to its joint offer for AXA APH with AMP. AMP rose 1.8%.
In currency markets, the U.S. dollar index, which measures the greenback against six major currencies, was recently down 0.5% at 74.93. The euro was at $1.4978, from $1.4926 in New York on Friday, and at 134.17 yen, from 133.79 yen.
The U.S. dollar was buying 89.56 yen from 89.65 yen. ANZ Bank senior dealer Alex Sinton expected the U.S. dollar to fall more. "It's a continuation of past trends and current problems. Bets against the U.S. dollar are still increasing."
Japanese government bond futures were lower, with the lead futures contract off 0.02 at 138.86 points.
Front-month Nymex crude oil futures were $1.04 higher on Globex at $77.39 a barrel, after slipping 59 cents Friday in New York.
BofA Merrill Lynch wrote in a report that it was revising its WTI and Brent crude-oil price forecasts up to $85 a barrel in 2010 from $75 earlier. "The combination of tighter physical oil supply and demand fundamentals, loose monetary policy and a weaker U.S. dollar are creating a growing risk for oil prices to spike above $100 a barrel as we head into 2011," Merrill Lynch's head of global commodities research Francisco Blanch wrote in a report.
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