Asian markets mixed on US, China stimulus hopes

September 10, 2012
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Tokyo ended flat, dipping 2.28 points to 8,869.37, with a slightly stronger yen compounding figures showing the Japanese economy grew at a slower pace than initially thought/AFP

, Hong Kong, Sept 10 – Asian markets were mixed on Monday, as weak data from China and the United States fuelling hopes for new stimulus measures were overshadowed by concerns over growth in the world’s two biggest economies.

The euro, which surged on Friday after the European Central Bank (ECB) announced a bond-buying plan to help under-pressure nations, eased slightly in early Asian exchanges.

Tokyo ended flat, dipping 2.28 points to 8,869.37, with a slightly stronger yen compounding figures showing the Japanese economy grew at a slower pace than initially thought.

Seoul was 0.25 percent down, or 4.88 points, at 1,924.70 while Sydney climbed 0.18 percent, or 8.0 points, to 4,333.8.

In the afternoon Hong Kong was flat while Shanghai gained 0.16 percent.

Regional markets saw big gains Friday following the ECB announcement to buy sovereign bonds in a bid to lower borrowing costs for countries such as Spain and Italy, which are struggling under huge debts.

However, later on Friday the US Labor Department said just 96,000 jobs were added last month, convincing many that the Fed would act in its policy meeting this week to introduce another round of bond purchases, or quantitative easing.

“A lot of the buying activity we are seeing is based on the premise that we will see easing from the US this week,” said Tim Waterer, senior trader at CMC Markets in Sydney.

“Traders now think that it is not an issue of if we will see easing, but the scope of any plan,” he told Dow Jones Newswires.

The prospect of easing measures sent the dollar lower against other currencies, although the unit bounced back on Monday.

The greenback bought 78.22 yen, from 78.21 in New York late Friday, while the euro was at $1.2781 and 100.01 yen, against $1.2811 and 100.21 yen.

On Wall Street the Dow closed up 0.11 percent,the S&P 500 gained 0.40 percent and the Nasdaq edged up 0.02 percent.

Expectations for new measures to boost growth in China were stoked after figures at the weekend showed industrial output growth weakened to 8.9 percent year-on-year in August, its slowest pace since May 2009.

With the economy expanding 7.6 percent in the second quarter of 2012 — the worst performance in three years and the sixth straight quarter of easing — economists say the government will likely act soon, possibly cutting interest rates.

But China released more data Monday showing imports unexpectedly fell in August, with softened demand at home hitting sentiment.

“The imports figure shows that domestic demand is in a sluggish state, but exports came in within expectations and that has mitigated the situation,” said Zhang Yanbin, an analyst at Zheshang Securities in China.

On oil markets New York’s main contract, light sweet crude for delivery in October, shed eight cents to $96.35 a barrel while Brent North Sea crude for October fell 34 cents to $113.91.

Gold was at $1,734.80 at 0645 GMT compared with $1,694.85 on Friday.

In other markets:

— Taipei closed 0.78 percent, or 57.83 points, higher at 7,482.74.

Taiwan Cement gained 4.0 percent to Tw$35.10 while Formosa Plastics was 1.47 percent higher at Tw$82.7.

— Wellington rose 0.13 percent, or 4.72 points, to 3,726.90.

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