Thai Reversal Leads Asia Higher

Ivaylo
20 Dec, 2006
New York City

Thai authorities stated they would exempt equities from capital controls meant to restrict appreciation of the Thai baht. The benchmark index of Thailand soared 11% on the decision. That fact, together with the record finish on US market overnight led Asian markets higher today. In Japan, the Nikkei gained on strength in exporters after the yen weakened, while HK ended higher on real-estate developers.

[R]7:30AM Asian stocks bounced back led by reversal of Thai central bank decision.[/R]
Asian markets ended higher on Wednesday. SET Index of Thailand rebounded 11% to 691.55, after plummeting 15% in the previous session. On Monday the Thai central bank introduced rules designed lock up 30% of foreign-currency deposits for a year and penalize investors trying to repatriate funds within a year. Late Tuesday, Thai authorities reverse the move.

In Japan, the Nikkei 225 Index closed up 1.4% at 1,7011.04. Exporters led the way. Honda advanced 2.3% while Toyota rose 1.3%. Toyota and related units Daihatsu Motor and truck maker Hino Motors are reportedly on schedule to build 9.45 million vehicles next year. Consumer electronics conglomerate NEC gained 2.9% while Toshiba advanced 0.9%.

Hang Seng Index of Hong Kong gained 1.5% to 19,240.12. Sun Hung Kai Properties advanced 0.7%, after the real-estate company paid $231.48 million for a residential lot in the exclusive Peak district on Hong Kong Island. China Life, the biggest life insurer in mainland China, surged 8.2% to a record as investors were optimistic about the share, after it won approval last week from mainland authorities to list shares in Shanghai.

In Seoul, the Korea Composite Stock Price Index, or Kospi, gained 1% to 1,442.28. Industrial Bank of Korea advanced 2.4% as concerns over the planned 15.7% stake sale by the Ministry of Finance and Economy have been overcome as it is anticipated to be delayed into next year

Other markets around the region also gained including Australia S&P/ASX 200 Index advancing 0.9% to 5607.80 and New Zealand NZSX-50 Index rising 0.6% to 4004.96. Singapore Straits Times Index surged 8% to 2920.83 and Shanghai Composite Index of China added 0.4% to 2,373.20, while Taiwan Weighted Price Index ended 0.7% higher to 7,648.35.

[R]6:30AM European shares advanced Wednesday on autos and merger deals.[/R]
European markets were higher on Wednesday. By mid morning, the FTSE 100 in London climbed 0.4% to 6,232.3, Frankfurt’s Xetra Dax gained 0.7% to 6,597.89, while the CAC 40 in Paris advanced 0.6% to 5,518.66.

Advancers

DaimlerChrysler led European autos higher, up 2%, before a supervisory board meeting. Volkswagen, whose board is locked in a management leadership struggle with chief shareholder Porsche, advanced 1%. Porsche added 1.8%.

Price increases buoyed Continental. The company said it might return some of its 4 billion euros to shareholders if it did not find suitable acquisitions. Shares gained 0.8%, while Michelin climbed 1.8%.

Ericsson led the tech sector after investors welcomed its acquisition of Redback Networks. Ericsson gained 1.5%. Swiss engineer ABB advanced 2.1% after Moody’s raised its rating on the debt of the company, in view of its the stronger-than-expected improvement of its operating performance.

Arcelor-Mittal the world largest steelmaker, advanced 1.5% following its statement that it is buying Sicartsa of Mexico from Grupo Villacero.

Decliners

HMV Group traded down 1.8% after the U.K. book and music retailer said that it anticipates its annual profit to be at the low end of market expectations.

Oil and gold

Crude oil for February delivery declined 15 cents at $63.31 a barrel in on the New York Mercantile Exchange. At London ICE Futures exchange, oil prices also moved slightly lower, with Brent crude for February delivery 17 cents lower to $62.64 a barrel.

Gold traded in London at $623.40 per troy ounce, higher than $620.20 late Tuesday. In Zurich, gold traded at $621.70, up from $619.95.

Currencies

The U.S. dollar dipped against the euro on Wednesday morning. The euro traded at $1.3229, up from $1.3192 late Tuesday. The British pound was quoted at $1.9707, up from $1.9682. The dollar bought 117.98 Japanese yen, down from 118.08.

[R]5:00AM Precious metals gained on Tuesday on dollar weakness and oil climb.[/R]
On the New York Mercantile Exchange, February gold finished $7.50 higher at $625.40 a troy ounce while March silver ended 18.5 cents up at $12.710 an ounce. January platinum advanced $16.40 to close at $1,118.50 an ouncea and March palladium added $4.30 to finish at $329.25 an ounce. The most-active March copper contract was off 1.20 cent at $3.0175 per pound.

The front-month January crude oil contract gained 94 cents to finish at $63.15 a barrel. January heating oil ended down 0.2 cent at $1.7187 a gallon. January unleaded gasoline rose 3.83 cents to close at $1.7005 a gallon. January natural gas edged 0.8 cents higher to stop at $7.083 a million British thermal units.

On the New York Board of Trade, March Arabica coffee futures closed 1.45 cents lower at $1.23 a pound, with May off 1.45 cents at $1.26. Futures on raw sugar in foreign ports for March gained 0.01 cent to close at 12.04 cents a pound, with May 0.05 cent higher at 11.85 cents.