Hong Kong and Australian stocks marched on from 19-month highs to lead Asian markets Thursday, but gains were capped as investors considered the road ahead after U.S. lawmakers passed a bill to avoid steep spending cuts and tax hikes.
Australia’s S&P/ASX 200 rose 0.5%, and Hong Kong’s Hang Seng Index rose 0.3% in choppy trading after both markets ended Wednesday at their best level since June 2011. The Hang Seng Index had retreated earlier in the day.
Taiwan’s Taiex climbed 0.6%, but South Korea’s Kospi bucked the upward trend to fall 0.5%.
Stock markets in mainland China and Japan were closed for holidays.
A sharp rally overnight in U.S. stocks helped the Dow Jones Industrial Average to its largest-ever first-session-of-the-year gain on Wednesday after the deal to avoid a large economic impact from the so-called fiscal cliff.
Still, investors remain cautious over a looming political battle in Washington to increase the U.S. government’s borrowing limit, pass a federal budget and undo or replace heavy spending cuts which were merely delayed in the fiscal-cliff deal.
Dariusz Kowalczyk, a senior economist at Credit Agricole, said the jump seen across risk assets Wednesday was a “one-off response to the U.S. budget vote,” and that investor risk appetite was set “to gradually lose momentum.”
He said market activity would be limited due the holidays in China and Japan, and also ahead of the key U.S. nonfarm payrolls data for December, due out Friday.
Thursday’s gains in Asia also came as China’s official non-manufacturing Purchasing Managers’ Index rose to 56.1 in December, up from 55.6 in November, after two separate gauges of manufacturing signaled a continued improvement in activity at mainland factories.
Major movers
After gains for many commodities overnight, most of the larger Australian resource names added to their recent gains, with Fortescue Metals Group Ltd. adding 2.4%, Oz Minerals Ltd. rising 5.3%, and mining giant Rio Tinto Ltd. advancing 1.7% in Sydney.
In Seoul, shares of Hyundai Steel Co. rose 0.6% and fellow steel maker Posco gained 1.7%.
In Hong Kong, mainland Chinese insurance and property stocks led further gains.
Shares of Ping An Insurance Group Co. climbed 2.3%, China Overseas Land & Investment Ltd. improved by 1.5% and China Resources Land Ltd. surged 4%.
Chinese property developers were among the strongest performers in Hong Kong last year. Both China Resources Land and China Overseas are up more than 80% over the past 12 months, significantly higher than the near-27% gain for the Hang Seng Index.
South Korean equities, meanwhile, saw a sell-down in major exporters after recent gains weighed on the market, with Samsung Electronics Co. losing 1.7% and Hyundai Motor Co. shedding 3.2%.
Marketwatch
