Nikkei stock index rose to its highest since June
Friday, 12 November 2010
HONG KONG, Nov 11 (Reuters): Japan's Nikkei stock index rose to its highest since June Thursday, adding to returns that have outstripped US and European markets in November, while a blast of Chinese economic data sent copper prices to a record high.
European shares opened modestly higher with the FTSEurofirst 300 up 0.2 per cent, London's FTSE 100 up 0.5 per cent and German's DAX up 0.4 per cent. But US stock index futures were slightly weaker.
Chinese consumer price inflation in October quickened to its fastest pace in two years, which is likely to sharpen complaints from Beijing and others that the Federal Reserve's $600 billion money printing scheme will hasten capital flows to their economies, complicating efforts to keep price pressures at bay.
Shares of large Chinese banks listed in Hong Kong rose on the views that banks can take advantage of higher lending rates while not necessarily paying more on deposits since in the near term China has few choices but to keep raising interest rates.
China's complaints are being aired at a contentious Group of Twenty (G20) leaders meeting in Seoul that kicked off Thursday. A breakthrough on alleviating economic imbalances could herald knee-jerk buying of risky assets and halt a US dollar rally that has lifted it to a 1-month high.
The Nikkei rose 0.3 per cent after closing Wednesday above the 38.2 per cent retracement of the move down since April to 2010 lows in September. That level is important for traders who use historical chart patterns to make decisions.
Shares of big exporters such as Toyota Motor Co and Canon Inc were among the biggest lifts to the index, with the dollar up nearly 2 yen in November.
This month, the 7.4 per cent gain in the Nikkei, Asia's second-worst performing equity index year to date, is higher than the 3 per cent rise in the US S&P 500 index and the roughly 2 per cent increase in the FTSEurofirst 300 index.
The MSCI index of Asia Pacific shares outside Japan surrendered early gains to stand little changed by late afternoon, threatening to extend a string of three down days after South Korea recorded its biggest single day of net foreign selling of shares.
Hong Kong's Hang Seng index was up 1.5 per cent, with mainland Chinese stocks listed in the territory up 2 per cent.
Bank stocks were leading the charge, with some investors hopeful for improving net interest margins, or the difference between lending and deposit rates. Chinese banks were some of the biggest decliners in the prior session, suggesting some value-driven investing as well.
Credit Suisse analysts said Chinese banks and insurers will probably benefit the most from higher interest rates and stable growth, but runaway inflation poses explosive risks, namely bursting bubbles in Hong Kong.
The Australian dollar was trading nearly unchanged on the day at US$1.0038, fighting back after the country's unemployment rate unexpectedly rose to 5.4 per cent, reducing the chances of a rate increase in February, and China's higher-than-expected CPI.
European shares opened modestly higher with the FTSEurofirst 300 up 0.2 per cent, London's FTSE 100 up 0.5 per cent and German's DAX up 0.4 per cent. But US stock index futures were slightly weaker.
Chinese consumer price inflation in October quickened to its fastest pace in two years, which is likely to sharpen complaints from Beijing and others that the Federal Reserve's $600 billion money printing scheme will hasten capital flows to their economies, complicating efforts to keep price pressures at bay.
Shares of large Chinese banks listed in Hong Kong rose on the views that banks can take advantage of higher lending rates while not necessarily paying more on deposits since in the near term China has few choices but to keep raising interest rates.
China's complaints are being aired at a contentious Group of Twenty (G20) leaders meeting in Seoul that kicked off Thursday. A breakthrough on alleviating economic imbalances could herald knee-jerk buying of risky assets and halt a US dollar rally that has lifted it to a 1-month high.
The Nikkei rose 0.3 per cent after closing Wednesday above the 38.2 per cent retracement of the move down since April to 2010 lows in September. That level is important for traders who use historical chart patterns to make decisions.
Shares of big exporters such as Toyota Motor Co and Canon Inc were among the biggest lifts to the index, with the dollar up nearly 2 yen in November.
This month, the 7.4 per cent gain in the Nikkei, Asia's second-worst performing equity index year to date, is higher than the 3 per cent rise in the US S&P 500 index and the roughly 2 per cent increase in the FTSEurofirst 300 index.
The MSCI index of Asia Pacific shares outside Japan surrendered early gains to stand little changed by late afternoon, threatening to extend a string of three down days after South Korea recorded its biggest single day of net foreign selling of shares.
Hong Kong's Hang Seng index was up 1.5 per cent, with mainland Chinese stocks listed in the territory up 2 per cent.
Bank stocks were leading the charge, with some investors hopeful for improving net interest margins, or the difference between lending and deposit rates. Chinese banks were some of the biggest decliners in the prior session, suggesting some value-driven investing as well.
Credit Suisse analysts said Chinese banks and insurers will probably benefit the most from higher interest rates and stable growth, but runaway inflation poses explosive risks, namely bursting bubbles in Hong Kong.
The Australian dollar was trading nearly unchanged on the day at US$1.0038, fighting back after the country's unemployment rate unexpectedly rose to 5.4 per cent, reducing the chances of a rate increase in February, and China's higher-than-expected CPI.