By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) -- Asia stocks gained on the last trading
day of a broadly positive month that nonetheless saw a sharp
divergence in performance through the region's major markets.
Friday trading had Japan's Nikkei Stock Average finishing 0.5%
higher, and Australia's S&P/ASX 200 index advancing 0.6%, while
South Korea's Kospi traded up 0.1%, shaking off early losses.
Chinese markets were also higher, with Hong Kong's Hang Seng
Index up 0.6%, and Shanghai Composite Index up 0.3%, although the
Shanghai benchmark remained near four-year lows.
Asia's advance followed modest gains for U.S. equity markets on
Thursday, with upside there 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 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 ($10.7 billion) in spending.
Japanese shares saw choppy trading on Friday, rising, then
falling, then rising again. The Nikkei Average gained 5.8% overall
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
more than 3% in November.
Yen weakness re-emerged during Friday's stock session, with the
dollar rising to ¥82.41 by the end of trading, up from
¥82.11 in early action, while the euro hit a seven-month high
against the yen.
Some currency-sensitive firms subsequently headed higher, with
Nikon Corp. (NINOF) gaining 4.5%, Fujitsu Ltd. (FJTSY) up 2%, and
Citizen Holdings Co. (7762.TO) ahead by 2.5%.
Elsewhere, Mitsubishi Heavy Industries Ltd. (7011.TO) climbed
3%, and Hitachi Ltd. (HIT) advanced 4.2%, 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 1.3%, and Bank of Communications Co. (BCMXY) rising 2%.
Elsewhere in the Hong Kong financial sector, insurer Ping An
Insurance Group Co. (PNGAY) climbed 1.8%, while China Life
Insurance Co. (LFC) improved by 0.9%.
On a more downbeat note, however, People's Insurance Co. Group
of China -- commonly known as PICC -- priced its initial public
offering at 3.48 Hong Kong dollars (45 U.S. cents), a level near
the low end of its indicative price range of HK$3.42- 4.03.
The firm makes its trading debut on Dec.7, and PICC's listing is
set to become the largest IPO -- at a projected $3.1 billion -- for
a Chinese state-owned company since 2010.
Hong Kong's blue-chip Hang Seng Index has gained 1.9% so far
this month, in contrast to the Shanghai Composite, which has
dropped 4.8%, and the Shenzhen Composite, which is down by more
than 11% amid concerns over the path of future corporate
earnings.
Deutsche Bank cut its view on shares of Hong Kong-listed brokers
on Friday, in part due to a challenging outlook for the mainland
stock markets. It downgraded Haitong Securities Co. to hold from
buy, with the firm's shares losing 1% in Hong Kong.
Hong Kong Exchanges & Clearing Ltd. (HKXCY) fell 1% after
announcing a plan to raise HK$7.75 billion via a private placement
to fund its acquisition of the London Metal Exchange.
In South Korean trading, auto giant Hyundai Motor Co. (HYMTF)
fell 1.5% but heavyweight electronics giant Samsung Electronics Co.
(SSNLF) supported the index with a 0.1% advance.
The Kospi is up 1.3% so far in November, while Sydney's
S&P/ASX 200 declined 0.2% over the month.
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 2.8% after
announcing cost plans on Thursday, while Fortescue Metals Group
Ltd. (FSUMY) rose 1.3%.
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