By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) -- Asia stocks moved off early lows to
mostly gain on Friday, the last trading day of a month that has
seen sharp divergence in performance for the region's major
markets.
Friday trading saw Japan's Nikkei Stock Average rise 0.8% and
Australia's S&P/ASX 200 index advance 0.7%.
Chinese markets were also advancing, with Hong Kong's Hang Seng
Index up 0.6% and the Shanghai Composite Index 0.2% higher,
although it continued to hover around four-year lows.
South Korea's Kospi traded flat after losing ground early in the
session.
Asia's advance followed modest gains for U.S. equity markets on
Thursday, with the upside limited by uncertainty that U.S.
politicians will succeed in hammering out a deal to prevent more
than $600 billion in tax hikes and spending cuts from taking place
automatically in January.
Dampening sentiment, Republican U.S. House Speaker John Boehner
said Thursday morning there has been "no substantive progress" in
negotiations on the so-called fiscal cliff, briefly rattling Wall
Street.
IG Index strategist Stan Shamu said the back-and-forth on the
fiscal cliff would likely fuel market volatility through the end of
December.
"Many [are] now convinced that negotiations will mirror that of
last August's debt-ceiling disaster and go right down to the wire.
As a result, a choppy last month of the year is probably the most
likely scenario, disappointing those hoping for a Santa Claus
rally," Shamu said.
The term "Santa Claus rally" refers to a year-end gain for
shares that tends to start in December.
Still, U.S. economic data Thursday suggested the recovery
continued, and Japanese data out Friday resulted in a set of
consumer inflation, unemployment and household spending data that,
while remaining relatively weak, either met or exceeded economist
expectations.
After the release of the data, the Japanese government announced
that it has approved its second stimulus package in a little more
than a month, consisting of 880.3 billion yen ($10.74 billion) in
spending.
Japanese shares saw choppy trading on Friday, rising, then
falling, then rising again. The Nikkei Average has gained 6.1% so
far in November, helped by speculation that next month's general
election will result in the introduction of some radical policies
to help the economy.
Exporters have performed particularly well over the past month
after the prospect of more monetary-policy easing sent the yen down
almost 3% in November.
Yen weakness re-emerged during Friday morning's stock session,
with the dollar rising to ¥82.34, up from ¥82.11 in
early action. Some currency-sensitive firms subsequently headed
higher, with Honda Motor Co. (HMC) moving back from early losses of
around 1% to trade up 0.3%, while Nikon Corp. (NINOF) gained
3.8%.
Elsewhere, Mitsubishi Heavy Industries Ltd. (7011.TO) climbed
1.6%, and Hitachi Ltd. (HIT) advanced 3.5%, after the firms said
they will merge their thermal-power businesses and related units in
a joint venture by 2014.
Hong Kong saw gains in the banking sector, with HSBC Holdings
PLC up 1.1%, and Bank of Communications Co. (BCMXY) rising
1.3%.
Elsewhere in the Hong Kong financial sector, insurer Ping An
Insurance Group Co. (PNGAY) climbed 1.3%, while China Life
Insurance Co. (LFC) improved by 0.7%.
The Hong Kong benchmark has gained 1.8% so far this month, in
contrast to the Shanghai Composite, which has dropped 5.1%, and the
Shenzhen Composite, which is down nearly 12% so far in the month
amid concerns over earnings.
"We believe China corporates will take a relatively long time to
deleverage, which will dampen their long-term growth and lead to a
tight liquidity environment," said strategists at Deutsche Bank on
Friday.
"Also, the near-term earnings contributions from new policies
are limited, which may not justify the current relative high
valuation," they said.
It also downgraded Haitong Securities Co. to hold from buy, with
the firm's shares dropping 1.6% in Hong Kong.
Hong Kong Exchanges & Clearing Ltd. (HKXCY) declined 0.8%
after announcing a plan to raise 7.75 billion Hong Kong dollars ($1
billion) via a private placement to fund its acquisition of the
London Metal Exchange.
In other Hong Kong market news, People's Insurance Co. Group of
China -- commonly known as PICC -- was due to announce the pricing
of its initial public offering Friday, ahead of a its Dec.7 trading
debut.
PICC's listing is set to become the largest IPO for a Chinese
state-owned company since 2010. The insurer indicated in marketing
materials that it would price its shares in a range of 3.42- 4.03
Hong Kong dollars (44-52 U.S. cents), raising up to $3.6
billion.
Losses for exporters weighed on the South Korean market Friday,
where Hyundai Motor Co. (HYMTF) edged down 0.2%, but chip maker SK
Hynix Inc. (HXSCL) tumbled 3.2%.
The Kospi is up 1.2% so far in November, while Sydney's
S&P/ASX 200 has declined 0.1% over the month so far.
In Australia on Friday, however, the benchmark garnered support
from a strong performance in the mining sector, after metals
advanced in New York trade on Thursday.
Of the majors, Rio Tinto Ltd. (RIO) climbed 3.2% after
announcing cost plans on Thursday, while Fortescue Metals Group
Ltd. (FSUMY) rose 1.2%.
Rare-earths group Lynas Corp. advanced 1.8% after announcing
that it has started operating its processing plant in Malaysia.
Among Japanese resource shares, oil major JX Holdings Inc.
(JXHGF) surged 2.3% after its refining unit said late Thursday that
it plans to raise its December crude throughput by 14% compared to
a year earlier. .
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