Banks weigh on Asian shares, dollar steady
Tuesday, 22 December 2009
TOKYO, Dec 21 (Reuters): Asian share markets struggled to hold early gains Monday, with bank shares pressuring some lower even as tech stocks gained, while the dollar held steady on the yen and hovered near a three-month high on the euro.
In Europe, Britain's FTSE 100, Germany's DAX and France's CAC-40 were expected to open as much as 0.7 per cent up, reassured by export data out of Japan, which rose the most in seven years last month.
Shares in Hong Kong and Shanghai slid as financial and property stocks fell on concern China would take steps to cool the property market, while banks such as HSBC eased on worries they made need to make provision against exposure to debt in Dubai.
Debt-ridden conglomerate Dubai World is expected Monday to ask key creditors for more time to pay off loans.
Seoul shares ended 0.17 per cent lower, with banks including KB Financial Group weighing but gains in technology exporters such as LG Electronics lending support.
"Banks are under pressure amid recent news flows pointing to a tighter regulatory environment, potentially worsening net interest margins," said Kwak Joong-bo, a market analyst at Hana Daetoo Securities.
Banks face having to set aside more funds or raise fresh capital in as little as three years, according to proposals by a global regulatory body that could change the way they do business.
The MSCI index of Asian stocks excluding Japan fell 0.5 per cent.
Bucking the trend were Japan and Taiwan, which both finished higher, while
The Nikkei average closed up 0.4 per cent as stocks such as chip-tester maker Advantest Corp gained.
"Investors welcomed solid earnings results from Oracle and (BlackBerry maker) Research in Motion over the weekend, as well as a weaker yen," said Norihiro Fujito, general manager of investment research at Mitsubishi UFJ Securities in Tokyo.
"But trading volume is becoming thin as the year-end draws near and the market could easily turn south if the yen strengthens again."
Upbeat results from Oracle and Research In Motion helped boost the Nasdaq Friday, which ended up 1.45 per cent.
The Dow Jones industrial average closed up 0.20 per cent and the Standard & Poor's 500 Index rose 0.58 per cent.
Australian stocks slipped 0.3 per cent but top airline Qantas Airways Ltd jumped after flagging a return to profit.
Banking shares were mostly lower after leading a rise of nearly 47 per cent in the benchmark share index from a five-year low reached in early March.
The dollar hovered near its highest point in more than three months against the euro as traders anticipated more year-end dollar short-covering until the Christmas break later this week.
A brighter outlook for the US economy after stronger figures on the job market and retail sales earlier this month has helped the dollar pull back from a long-running downtrend.
"The dollar may extend gains a little more as momentum buyers could chase the dollar up while it stays in an uptrend," said Masafumi Yamamoto, chief FX strategist for Barclays Capital in Japan.
In Europe, Britain's FTSE 100, Germany's DAX and France's CAC-40 were expected to open as much as 0.7 per cent up, reassured by export data out of Japan, which rose the most in seven years last month.
Shares in Hong Kong and Shanghai slid as financial and property stocks fell on concern China would take steps to cool the property market, while banks such as HSBC eased on worries they made need to make provision against exposure to debt in Dubai.
Debt-ridden conglomerate Dubai World is expected Monday to ask key creditors for more time to pay off loans.
Seoul shares ended 0.17 per cent lower, with banks including KB Financial Group weighing but gains in technology exporters such as LG Electronics lending support.
"Banks are under pressure amid recent news flows pointing to a tighter regulatory environment, potentially worsening net interest margins," said Kwak Joong-bo, a market analyst at Hana Daetoo Securities.
Banks face having to set aside more funds or raise fresh capital in as little as three years, according to proposals by a global regulatory body that could change the way they do business.
The MSCI index of Asian stocks excluding Japan fell 0.5 per cent.
Bucking the trend were Japan and Taiwan, which both finished higher, while
The Nikkei average closed up 0.4 per cent as stocks such as chip-tester maker Advantest Corp gained.
"Investors welcomed solid earnings results from Oracle and (BlackBerry maker) Research in Motion over the weekend, as well as a weaker yen," said Norihiro Fujito, general manager of investment research at Mitsubishi UFJ Securities in Tokyo.
"But trading volume is becoming thin as the year-end draws near and the market could easily turn south if the yen strengthens again."
Upbeat results from Oracle and Research In Motion helped boost the Nasdaq Friday, which ended up 1.45 per cent.
The Dow Jones industrial average closed up 0.20 per cent and the Standard & Poor's 500 Index rose 0.58 per cent.
Australian stocks slipped 0.3 per cent but top airline Qantas Airways Ltd jumped after flagging a return to profit.
Banking shares were mostly lower after leading a rise of nearly 47 per cent in the benchmark share index from a five-year low reached in early March.
The dollar hovered near its highest point in more than three months against the euro as traders anticipated more year-end dollar short-covering until the Christmas break later this week.
A brighter outlook for the US economy after stronger figures on the job market and retail sales earlier this month has helped the dollar pull back from a long-running downtrend.
"The dollar may extend gains a little more as momentum buyers could chase the dollar up while it stays in an uptrend," said Masafumi Yamamoto, chief FX strategist for Barclays Capital in Japan.