Recovery Today - Asian Markets

Stock markets in Asian region closed higher on Friday 16 January 2009, showing some sign of improvement at the end of week convincing recovery from Thursday's big falls. The regional markets followed the gains on Wall Street registered last night. In the region, technology and resource stocks showed some upbeat.

On Wall Street, the stock markets showed sign of improvement despite of disappointing economic data, falling crude price and the overall financial sector. The Dow Jones Industrial Average ended higher by 12.3 points at 8,212, the Nasdaq closed higher by 22.2 points at 1,511 and the S&P 500 closed higher by 1.1 points at 843.74.

Meanwhile, news of Bank of America might require bailout money to finance the Merrill Lynch acquisition came true as U.S. officials early Friday disclosed they have agreed to provide Bank of America Corporation (BAC) with an additional $20 billion in capital and backstop losses on up to $118 billion of its assets. The announcement from the U.S. Treasury Department comes the day after the U.S. Senate moved up a vote related to the release of a second trance of funding under the controversial $700 billion Troubled Asset Relief Program and just hours before Bank of America was scheduled to release its fourth quarter earnings.

Bank of America already has received $25 billion in TARP funding but needed an additional capital injection to help it digest losses related to its acquisition of Merrill Lynch & Co.

In the commodity market, crude oil prices languished near $35 a barrel Friday in Asia as traders eyed a weakening U.S. economy and falling global demand that's sent crude down a third since last week.

Light, sweet crude for February delivery was down 47 cents at $34.93 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. The contract fell $1.88 overnight to settle at $35.40, after trading as low as $33.20, a five-year low. Yesterday's closing is the lowest settlement since 24 December 2008.

Brent crude oil for February settlement declined 39 cents, or 0.9%, to settle at $44.69 a barrel on London's ICE Futures Europe exchange yesterday. The more-active March Brent contract rose 6 cents to $47.87 a barrel.

In the currency market, the U.S. dollar weakened against the Australian dollar, New Zealand dollar while it strengthened against the Japanese yen, South Korean won, the Singapore dollar.

In late Tokyo trades, the dollar was quoted at 90.40 yen, up 0.56 yen from Thursday's close of 89.84 yen in Tokyo.

The Hong Kong dollar was trading at HK$ 7.7586 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In late Sydney trades, the Australian dollar was trading at US$0.6736 up from Thursday's close of US$0.6626.

In late Wellington trades, the New Zealand dollar was buying US$0.5469, up compared to US$0.5370 at close on Thursday.

In late Seoul trades, the South Korean won was trading at 1,357.50 won to the U.S. dollar on Friday, up by 34.210 won from Thursday's close of 1,391.60 won.

In Taipei, the Taiwan dollar strengthened against the US dollar as it was trading at NT$ 33.351 in the afternoon trade against the Thursday closing of NT$ 33.367

The Singapore dollar finished at 1.4856 against the previous close of 1.4940 while the Malaysian Ringgit closed Friday's deals at 3.5775.

In Manila, the Philippines peso strengthened against the dollar touching two day high. Currently, the dollar-peso pair is worth 47.12, compared to 47.11 hit in the early trade.

Coming back in equities, Japanese stock index finished the session higher, with rebound in banks and financials, exporters, and other recently battered shares, buoyed by a firm Wall Street overnight on expectation that the US government would provide fresh capital to its crisis-hit banks.

The Nikkei 225 Stock Average index gained 206.84 points, or 2.6%, to 8,230.15, while the broader Topix rose 21.9 points, or 2.8%, to 818. In a week, the Nikkei 225 stock average lost 606.65 points, or 6.87%, while the broader Topix erased 37 points, or 4.33%.

In Mainland China, the Shanghai stock index finished the session higher on hopes the government would unveil more stimulus measures before the Lunar New Year including further interest rate cuts and supportive policies to revive earnings and counter an economic slowdown.

The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, surged 34.23 points, or 1.8%, to 1,954.43. The index has gained 49.57 points, or 2.6%, in the week.

Banking stocks outperformed after China's $200 billion sovereign wealth fund said it's been buying shares in the three biggest banks, while machinery and shipbuilding climbed on hopes it will be next to receive government aid.

In Hong Kong, the benchmark index registered its first close in positive territory in seven sessions. The Hang Seng index closed up 12.55 points or 0.09% at 13,255.51. The Hang Seng China Enterprises index jumped 104.98 points or 1.49% at 7,147.34.

In Australia, the stock market finished the session higher after a firmer opening, as miners, materials and resources bounced back following the hammering yesterday. The benchmark S&P/ASX200 jumped 21.40 points, or 0.61%, to 3,550.9, while the broader All Ordinaries rose by 18.1 points, or 0.52%, to 3,494.9. In a week, the S&P/ASX200 has lost 184.8 points, or 4.95%, while All Ordinaries erased by 185.5 points, or 5.04%.

In New Zealand, stock market advanced on the last trading day of the week following the regional trend. The NZX50 ascended 0.34% or 9.325 points to close at 2752.16. The NZX 15 rose 0.35% or 17.335 points to 4980.694.

On the economic front, Prime Minister John Key promises to help small businesses survive and avoid staff lay-offs as part of his response to a prediction of soaring unemployment.

In South Korea, the stock markets registered a good rebound by closing the day on higher note after volatile trade carried on the back of news that U.S. government support for Bank of America boosted regional financials stocks, but Samsung Electronics under performed after it announced reorganization plans. The Korea Composite Stock Price Index gained 23.86 points or 2.15% closing the day at 1,135.20. For the week, market ended 3.87% or 45.76 points.

In Singapore, the Singapore share finished the session higher, with rebound in transportation and communication, services, and manufacturer, buoyed by firmer Wall Street overnight on expectation that the US government would provide fresh capital to its crisis-hit banks to prevent the year-long recession from deepening. The benchmark Straits Times Index gained 26.39 points, or 1.55%, to 1,730.45. The index has lost 75.57 points, or 4.18%, in a week.

On the economic front, the Singapore's non-oil exports slid worse-than-expected seasonal adjusted 13.1% in December from the previous month. On a year-on-year basis, NODX decreased by 21% in December 2008, following the 17% decline in the preceding month.

Singapore's National Wages Council said on Friday unemployment will be substantially higher this year, and recommended firms affected by the economic downturn institute a wage freeze or wage cuts to stay competitive and save jobs.

In Philippines, the stock market ended marginally lower, bucking regional indices, as investors chose to stay on the sidelines in response to the ominous economic outlook for the Philippines economy. The benchmark index PSEi lost 0.24% or 4.84 points to 1,950.13, while the All-share index declined 0.11% or 1.46 points to 1,238.77.

On the economic front, Fitch Ratings has forecast the Philippines' economic growth to decelerate to 2.5% in 2009, and the national government budget shortfall to widen to 2.3% of GDP. Fitch expects the country's current account to turn into a small deficit this year, and foreign reserves to decline slightly from last year's US$37.1billion.

On the positive note, remittances from Filipino workers abroad, a key driver of consumer spending, grew by 10.5% to $1.3 billion in November from a year earlier, boosting liquidity during the month. The steady stream of remittances provides the economy with much needed foreign exchange liquidity in the midst of a challenging external environment.

In Taiwan, the stock market followed the regional trend, closing the last day of the week on a higher note. Taiex - the benchmark index showed some recovery from yesterday's debacle, closing higher by 32.93 points or 0.76% at 4,353.70. The market moved in the narrow range of 4382.43 - 4313.19. For the week, the index lost 149.04, closing 3.30% lower.

In India, the key benchmark indices surged to day's high in fag end of the day's trading session on steady buying demand for index pivotals especially index heavyweight Reliance Industries that surged a little under 7%. The BSE 30-share Sensex gained 266.77 points, or 2.95% to 9,313.51, as per provisional closing. The S&P CNX Nifty advanced 91.90 points, or 3.36%, to 2,828.80

Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.11% or 0.98 points to 896.47, while Indonesia's Jakarta composite increased by 20.38 points or 1.52% to 1363.88. In Thailand, the Thai Stock exchange gained 8.94 points or 2.10% to 435.20.

In the other regional markets, European shares advanced broadly on Friday, with sharp gains from oil producers, mineral extractors and banks helping shares recoup some of this week's hefty losses. The surge in banking stocks was seen after an announcement from U.S. government that it is injecting $20 billion into Bank of America and guaranteeing losses on billions more as the Charlotte giant struggles to digest the acquisition of Merrill Lynch.

On a national level, the French CAC-40 index rose 2.2% to 3,061.21, the German DAX 30 index advanced 2.1% to 4,426.30 and the U.K. FTSE 100 index climbed 1.8% to 4,196.20.