HONG KONG: Shanghai and Hong Kong led a regional stocks rally yesterday as investors welcomed Beijing’s green light for a new futures market as well as a short-selling experiment in China.The markets were also given a lift by data released the day before that showed mainland exports surged 17.7 per cent in December to snap a 13-month falling streak.
The week across the region started on a high despite disappointing jobs figures out of the eurozone and the United States on Friday, which dampened recent optimism for the global economic recovery.
Shanghai shares rose 0.83 per cent as securities firms and banks rallied on Beijing’s approval Friday of the launch of a stock index futures market, and a trial for short selling and margin trading, dealers said.
However, the index was off earlier highs on profit-taking.
Hong Kong shares were 0.75 per cent higher in afternoon trade.
“The approval raises expectations that brokerages may gain a lot from the diversification of investment tools,” Huatai Securities analyst Zhou Lin told Dow Jones Newswires.
However, Guotai Jun’an Securities analyst Zhai Peng said: “The launch of stock index futures just provides a new investment tool, but it won’t change the stock market trend.”
Margin trading allows investors to borrow money from financial institutions to buy shares or other securities that they expect to rise.
If the price goes up, they can pay back the borrowed money. If the price goes down, investors must still pay back the full amount.
Short-selling is a similar operation, in which investors sell borrowed shares, expecting the price to decline. If the price does fall, they can buy the shares at the lower price and return them to the lender.
There were also gains in Sydney, which ended 0.79 per cent, or 38.6 points, higher at 4,950.70 on the back of the China export figures.
Seoul closed flat, down 1.14 points to 1,694.12 as auto and tech exporters lost ground on concerns over the strength of the Korean won. Singapore was 0.45 per cent higher in afternoon trade.
Tokyo was closed yesterday for a public holiday.
The US Labor Department reported the economy lost 85,000 jobs in December while the unemployment rate held at 10.0 per cent.
And in the European Union the seasonally-adjusted unemployment rate for the 16 euro countries hit 10 per cent in November — the highest since the currency was launched a decade ago and up from 9.9 per cent in October.
The dollar, which rallied last week on the back of comments from Japan’s new finance minister that he preferred a weaker yen, fell on the jobs news.
The dollar stood at ¥92.22 in mid-afternoon trade, down from ¥92.72 in New York trading late Friday.
The euro also climbed to US$1.4515 from 1.4404 and fetched ¥133.87 from 133.55.
Crude jumped in Asian trade, as the cold snap in the northern hemisphere boosted demand for heating fuel.
New York’s main futures contract, light sweet crude for February delivery, rose 65 cents to US$83.40 a barrel.
Brent North Sea crude for February delivery was 64 cents higher at US$82.01.
Gold opened higher in Hong Kong at US$1,154.00-1,155.00 an ounce, up from Friday’s close of US$1,124.50-1,125.50.
In other markets:
Taipei closed up 42.92 points, or 0.52 per cent, at 8,323.82.
“After a strong showing in 2009, shares largely appear expensive. That’s why not many investors are willing to chase prices at the moment,” Mega Securities analyst Alex Huang said.
The steel sector remained attractive on rising product prices with Tung Ho Steel up 5.20 per cent at 37.45 dollars.
Manila rose 0.33 per cent, or 10.17 points, to 3,087.35.
The index finished at a five-week high as dealers looked to the strong overseas market. Ayala Corp. rose 0.8 per cent to 300 pesos while Philippine Long Distance Telephone Co. gained 0.56 per cent to 2,710 pesos.
Wellington fell 0.20 per cent, or 6.48 points, to 3,303.75.
Auckland International Airport led the falls, losing six cents to 2.02 dollars, after saying it was buying a quarter stake in North Queensland Airports. — AFP