Asian shares sluggish amid China rate hike worries
Wednesday, 8 December 2010
SEOUL, Dec 7 (Agencies): Stock markets in Asia were mixed Tuesday as a stronger yen helped pushed down big name Japanese exporters and worries about a possible interest rate hike in China damped sentiment.
Japan's Nikkei 225 stock average fell 0.2 per cent to 10,147.36.
Investors sold shares of Japanese exporters as the yen climbed against the dollar. A stronger yen reduces the value of exporters' overseas profits when repatriated. Sony Corp was down 1.2 per cent, while Honda Motor Co fell 1.8 per cent.
China's benchmark Shanghai Composite index shed 0.5 per cent to 2,842.73 amid speculation by Chinese media that Beijing may hike interest rates soon.
China and Japan - Asia's two biggest economies - are facing opposite challenges.
Japan is trying to bolster growth through low interest rates in the face of persistent deflation, or falling prices, and a stubborn headwind in the form of a strong yen.
China, a key growth driver for the world, is grappling with how to douse rising prices and cool its still red-hot economy. November inflation, which analysts say might show a further increase, is due out Monday.
The inflation rate spiked to 4.4 per cent in October - well above the official 3 per cent target - driven by a 10.1 per cent jump in food costs.
"There could be some nervousness about China's inflation numbers and new possible tightening measures, including rate hikes," said Mark Tan, who helps manage the equivalent of about $11 billion in bonds and equities at UOB Asset Management in Singapore.
Benchmarks in Singapore, New Zealand, the Philippines and India also retreated.
Hong Kong's Hang Seng Index rebounded from early losses to rise 0.6 per cent to 23,369.19. South Korea's Kospi rose 0.4 per cent to 1,962.32, and Australia's S&P/ASX 200 added 0.9 per cent to 4,730.30, thanks to buying into natural resource-related issues.
Australian mining giant BHP Billiton Ltd rose 1.2 per cent, while rival Rio Tinto Ltd added 1.6 per cent.
Meanwhile, the euro slipped in early trade before recovering to $1.3320, just above its late levels in New York Monday, with support seen at $1.3268.
The next major market event will be the outcome of the Irish budget, due later Tuesday, traders said. The deeply unpopular government is set to unveil a record austerity plan that will inflict more pain on voters.
Japan's Nikkei 225 stock average fell 0.2 per cent to 10,147.36.
Investors sold shares of Japanese exporters as the yen climbed against the dollar. A stronger yen reduces the value of exporters' overseas profits when repatriated. Sony Corp was down 1.2 per cent, while Honda Motor Co fell 1.8 per cent.
China's benchmark Shanghai Composite index shed 0.5 per cent to 2,842.73 amid speculation by Chinese media that Beijing may hike interest rates soon.
China and Japan - Asia's two biggest economies - are facing opposite challenges.
Japan is trying to bolster growth through low interest rates in the face of persistent deflation, or falling prices, and a stubborn headwind in the form of a strong yen.
China, a key growth driver for the world, is grappling with how to douse rising prices and cool its still red-hot economy. November inflation, which analysts say might show a further increase, is due out Monday.
The inflation rate spiked to 4.4 per cent in October - well above the official 3 per cent target - driven by a 10.1 per cent jump in food costs.
"There could be some nervousness about China's inflation numbers and new possible tightening measures, including rate hikes," said Mark Tan, who helps manage the equivalent of about $11 billion in bonds and equities at UOB Asset Management in Singapore.
Benchmarks in Singapore, New Zealand, the Philippines and India also retreated.
Hong Kong's Hang Seng Index rebounded from early losses to rise 0.6 per cent to 23,369.19. South Korea's Kospi rose 0.4 per cent to 1,962.32, and Australia's S&P/ASX 200 added 0.9 per cent to 4,730.30, thanks to buying into natural resource-related issues.
Australian mining giant BHP Billiton Ltd rose 1.2 per cent, while rival Rio Tinto Ltd added 1.6 per cent.
Meanwhile, the euro slipped in early trade before recovering to $1.3320, just above its late levels in New York Monday, with support seen at $1.3268.
The next major market event will be the outcome of the Irish budget, due later Tuesday, traders said. The deeply unpopular government is set to unveil a record austerity plan that will inflict more pain on voters.