Wednesday 14 December, 10:00 AM GMT (Thomson Financial): Asian markets
ended mixed in the wake of a 25 basis point rise in the target rate of the
U.S. Federal Reserve to 4.25%. Japan's market fell heavily on
weaker-than-expected Tankan numbers, while Hong Kong's market edged higher
on less hawkish comments in the Fed statement. Meanwhile, Korea's bourse
edged lower on program selling, while Taiwan's market dipped on weakness
in technology stocks. Finally, the market in Australia rose on hopes that
U.S. interest rate hikes were coming to an end.
Tokyo's Nikkei-225 Index plummeted 314.28 points or 1.99% to 15464.58,
while Hong Kong's Hang Seng Stock Index firmed 33.64 points or 0.23% to
14976.26. Korea's Kospi Index eased 2.21 points or 0.17% to 1334.27, while
Taiwan's Weighted Index slipped 25.83 points or 0.41% to 6235.35.
Australia's All Ordinaries Index rose 28.60 points or 0.63% to 4567.30.
Japan's market dropped heavily as investors reacted negatively to the
weaker-than-expected Tankan survey, with the strengthening of the yen
against the U.S. dollar in the wake of less hawkish comments from the U.S.
Federal Open Market Committee (FOMC) also contributing to negative
sentiment. In December, the headline diffusion index for large
manufacturers rose to plus 21 from plus 19 in September, although this was
below the 23 figure that the market was expecting. This prompted investors
to take profits ahead of the year-end as high technology stocks, car
makers and steel makers fell.
The strengthening of the yen against the U.S. dollar, which makes Japanese
exports more expensive, weighed on the high technology sector, with Tokyo
Electron, Rohm and Advantest tumbling, while auto makers came under heavy
pressure, with Honda, Toyota and Fuji Heavy Industries, the maker of
Subaru cars, all skidding.
Steel makers also fell in the wake of the Tankan numbers, with Nippon
Steel falling heavily after targeting only modest profit growth, with
Sumitomo Metal Industries and Kobe Steel also plunging. Elsewhere,
brokerage house Nikko Cordial slumped after the Nihon Keizai Shimbun
reported that Citigroup would reduce its stake in the company.
Hong Kong's market closed higher as the market reacted positively to the
U.S. Fed's statement in the wake of its 25 basis point rate hike on hopes
that increases will come to end sooner rather than later. Property stocks
were lifted by the perceived change in stance, with Henderson Land and
Hang Lung Properties rising sharply, though banking stocks performed less
well, with HSBC Holdings rising but Bank of East Asia and Hang Seng Bank
ending flat.
In Korea, the key share index ended lower on program selling as hopes for
an end to the U.S. interest rate tightening cycle led to the won
strengthening against the greenback and exporters losing weight.
Technology stocks fell, with heavyweight Samsung Electronics dropping
heavily, while LG Electronics dipped but Hynix Semiconductor gained.
Banking stocks were mixed, with Hana Financial Group plunging and Korea
Exchange Bank falling but Woori rising.
Meanwhile, Taiwan's market softened despite some early strength as the
technology sector led falls in the market. UMC, the world's second largest
chip maker by revenue, fell heavily after it announced that it would
restate its financial statements for the last three years under U.S.
Generally Accepted Accounting Principles (GAAP), with TSMC ending sharply
lower and Hon Hai Precision Industries also falling. Meanwhile, financial
stocks exhibited weakness, with Cathay Financial and Taishin Financial
both losing ground.
Finally, the market in Australia closed higher as the market reacted
positively to less hawkish statement from the U.S. FOMC. Banks in
particular benefited, with National Australia Bank, Westpac and ANZ rising
as investment bank Macquarie also gained. Elsewhere, national flag carrier
Qantasvrose strongly on news of a fleet renewal program and ongoing growth
in domestic load factors.
Ian.Littlewood@thomson.com; Thomson Financial
This is Thomson Financial Corporate Services Asia Market Commentary. The
information herein is believed to be true and accurate. If you have any
questions please e-mail James Sang at James.Sang@tfn.com. We take no
responsibility for inaccurate information and reserve the right to update
our reports. For more information about Thomson Financial visit us
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SOURCE Thomson Financial Corporate Group
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