By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) -- Asia stocks moved off early lows to gain
on the last trading day of a broadly positive month that
nonetheless has seen sharp divergence in performance for the
region's major markets.
Friday trading had Japan's Nikkei Stock Average and Australia's
S&P/ASX 200 index each advancing 0.8%, while South Korea's
Kospi rose 0.3%, shaking off early losses.
Chinese markets were also higher, with Hong Kong's Hang Seng
Index and the Shanghai Composite Index each up 0.6%, 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 ($10.74 billion) in spending.
Japanese shares saw choppy trading on Friday, rising, then
falling, then rising again. The Nikkei Average has gained 6% so far
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
almost 3% in November.
Yen weakness re-emerged during Friday morning's stock session,
with the dollar rising to ¥82.43, up from ¥82.11 in
early action.
Some currency-sensitive firms subsequently headed higher, with
Nikon Corp. (NINOF) gaining 3.8%, Fujitsu Ltd. up 1.3% and Citizen
Holdings Co. ahead by 1.4%.
Elsewhere, Mitsubishi Heavy Industries Ltd. (7011.TO) climbed
1.9%, and Hitachi Ltd. (HIT) advanced 3.7%, 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 1.2%, and Bank of Communications Co. (BCMXY) rising
2.3%.
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 1.1%.
People's Insurance Co. Group of China -- commonly known as PICC
-- was due to announce the pricing of its initial public offering
Friday, ahead of a its Dec.7 trading debut.
PICC's listing is set to become the largest IPO for a Chinese
state-owned company since 2010. The insurer indicated in marketing
materials that it would price its shares in a range of 3.42- 4.03
Hong Kong dollars (44-52 U.S. cents), raising up to $3.6
billion.
The Hong Kong blue-chip index has gained 2% so far this month,
in contrast to the Shanghai Composite, which has dropped 4.5%, and
the Shenzhen Composite, which is down by more than 11% so far in
the month amid concerns over the path of future corporate
earnings.
Deutsche Bank said that it's now less upbeat on shares of Hong
Kong-listed brokers due to high valuations, as well as a
challenging outlook for the mainland stock markets. It also
downgraded Haitong Securities Co. to hold from buy, with the firm's
shares losing 0.6% in Hong Kong.
Hong Kong Exchanges & Clearing Ltd. (HKXCY) fell 1% after
announcing a plan to raise 7.75 billion Hong Kong dollars ($1
billion) via a private placement to fund its acquisition of the
London Metal Exchange.
In South Korean trading, auto giant Hyundai Motor Co. (HYMTF)
rose 0.4% but chip maker SK Hynix Inc. (HXSCL) tumbled 3.2%.
The Kospi is up 1.5% so far in November, while Sydney's
S&P/ASX 200 has declined 0.2% over the month so far.
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 3.2% after
announcing cost plans on Thursday, while Fortescue Metals Group
Ltd. (FSUMY) rose 0.9%.
Among Japanese resource shares, oil major JX Holdings Inc.
(JXHGF) rose 1.8% after its refining unit said late Thursday that
it plans to raise its December crude throughput by 14% compared to
a year earlier. .
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