Asian Markets Mixed as Investors Anticipate U.S. Election Results
Nov 2nd 2010 8:40AM
Updated Nov 2nd 2010 9:19AM
In Asia on Tuesday, Hong Kong's Hang Seng Index rose 0.1% to 23,671 and China's Shanghai Composite Index inched down 0.3% to 3,045. In Japan, the Nikkei 225 crept up 0.1% to end the day at 9,160.
The dollar fell against most currencies, sending most Asian stocks higher. Investors worldwide will be closely monitoring Tuesday's U.S. midterm elections, with many predicting that if President Obama loses his Democratic majority in both the House of Representatives and the Senate, the dollar will continue to slide. Success for Republicans would likely lead to political gridlock in Washington, preventing Obama from implementing firm policies to lift the economy.
Already on Tuesday morning, the dollar has neared a nine-month low against the British pound, and in China, the yuan also gained against the greenback. And even if the Federal Reserve moves ahead with its plans to inject more cash into the economy, no one is promising a quick recovery.
Chinese Coal Falls, Steel Rises
The weaker dollar attracted investors to blue chip Hong Kong stocks. Banks rose, with China Construction Bank soaring 2.2%, Industrial & Commercial Bank advancing 1.3%, Bank of China climbing 1.3% and both Bank of Communications and China Citic adding 1%.
In China, steel companies climbed, helping the index recover after sinking earlier in the day. Inner Mongolia Steel rocketed up 10.1%, Wuhan Iron & Steel soared 3.3%, Maanshan Iron & Steel climbed 3% and Baoshan Iron & Steel rose 1.9%.
It was good news for shipping companies, with China Shipping Container Lines hitting the 10% daily maximum gain and China Shipping Development surging 7.4. China Cosco advanced 4.4%, having last week announced that it had returned to profitability with a 16% rise in the volume of containers it shipped out in the third quarter.
Chinese appliance makers took a tumble with Qingdao Haier, a maker of refrigerators and freezers, plunging 3.5%, and Hisense Electric sinking 3%. Hisense Kelon Electrical dropped 1%. Kelon's former chairman, Gu Chujun is serving a 10-year prison sentence for embezzling money from the company: He held 20th place on Forbes' list of China's richest men in 2001.
Japan Shares Lower as Investors Await Government Moves
In Japan, investors are awaiting the next meeting of the country's financial policymakers, scheduled for later this week. On Tuesday, shares of some automakers hit the skids, with Honda slumping 2.3% and Mazda sliding 1%. Meanwhile, Toyota rose 1.1% despite slow October sales. According to Bloomberg, the company's year-over-year sales dropped 6% in China, the world's biggest car market, last month.
Fujikura was among today's biggest losers with the cable, wire and fiber maker missing profit targets, along with Gree, an electronic social network service that dove more than 18%. Meanwhile, Elpida, a maker of computer memory chips, sank 5.1% after suffering a drop in net income for the quarter.