Asian Shares Mixed; Fiscal Cliff Hopes Support

Tuesday, December 11th, 2012 09:14:25


Asian markets were mixed on Tuesday, with hopes for progress in U.S. fiscal cliff negotiations supporting sentiment, while Japanese stocks were lower ahead of Sunday’s election.

In the U.S., negotiations on how to best resolve the fiscal cliff were attracting attention, after The Wall Street Journal reported that budget talks between the White House and Republican House Speaker John Boehner had progressed in recent days.

“There is a mild risk-on sentiment because of expectations that the fiscal cliff situation will be resolved,” said Joe Bracken, head of macro strategies BT Investment Management in Sydney. “If it does get resolved, you are going to have a very good start to 2013.”

Another key event on the horizon is the U.S. Federal Reserve’s policy meeting. The two-day meeting will conclude on Wednesday and is expected to give clues on the central bank’s policy direction in the coming months.

The main near-term event in Asia will be the Japanese elections on Sunday, which will be followed by the Bank of Japan’s policy meeting next week. The Liberal Democratic Party is enjoying a comfortable lead in the polls and, if victorious, is expected to pressure the Bank of Japan to implement aggressive monetary easing measures.

In currency markets, the U.S. dollar stabilized against the yen on Tuesday, at Y82.36, after falling 0.2% against the Japanese currency overnight. However, the greenback extended its decline against South Korea’s won, falling to a 15-month low of 1,077.60 won per dollar in early trading.

The Nikkei fell 0.4%, though troubled electronics company Renesas Electronics Corp. shot up 6.2% on news that a government-backed fund, along with a group of Japanese manufacturers, has bailed out the firm with $2.4 billion financial package.

Japanese power companies fell sharply, after experts from the nuclear energy regulator concluded that Japan Atomic Power’s Tsuruga power plant is probably located on an active fault. While the company said it would conduct its own survey, fears that plant will need to be decommissioned weighed on Japanese power companies which are Atomic Power’s main shareholders: Kansai Electric Power dropped 7.9% and Chubu Electric Power fell 6.7%.

In Hong Kong, the Hang Seng Index was flat, with Cathay Pacific Airways was down 0.9% on news that the Flight Attendants Union will take industrial action during the Christmas holidays if the airline fails to re-open talks over a wage dispute.

The Shanghai Composite dropped 0.3% in Mainland China, while the Kospi added 0.1% in South Korea.

Australian stocks pushed higher, with the S&P/ASX 200 adding 0.3%. Miners outperformed after the price of iron ore increased by 2.0% overnight. Rio Tinto was up 1.0% and Fortescue Metals Group was 3.8% higher.

Untitled Document

The Market Quotes Powered By Forexpros, the Forex, Futures, and Stock Markets Portal.



  • question

  • question