Shares in Asia staged a mild rally to finish the week broadly in the green on Friday, with individual companies rather than sectors leading the way. The carry trade continued to gain favor among investors, as the yen slid to 110.38 vs. the dollar, the currency's lowest level in two weeks.
Value stocks led the region's gains, as the Taiwanese Taiex rose 140 points, or 1.7%, to 8586, while the South Korean Kospi jumped 28 points, or 1.51%, to 8586. In Japan, the Nikkei climbed 167 points, or 1.08%, to 15,680. Industrial and steel stocks lifted the indices, while exporters were mixed.
surged 6%, to 820 yen, while
jumped 2.91%, to 67,200 yen, but
all declined between 0.5% and 1.13%.
Unemployment data released today were in line with expectations, at 4%, continuing to rise from a low of 3.6% reached in July. Inflation rose at its fastest rate so far this year, increasing 0.3% on the year in October, above 0.1% expected by analysts, mostly because of surging food and energy prices.
In Hong Kong, the Hang Seng ended the day 161 points higher, up 0.6%, at 28,643, but in China the Shanghai Composite Index bucked the bullish trend, slumping 131 points, or 2.6%, to 4871.
"Right now, it's some of the laggards
outside China that look attractive -- it's what to be wary of rather than what's cheap," says Hugh Young, managing director of $54 billion Aberdeen Asset Management Asia in Singapore.
"We're very wary of China, and by and large we say that it's a bubble waiting to burst. When companies are trading at 60 times earnings, it's not the place to put your money," adds Young.
Chinese "A" shares fell broadly, dominated by losses in commodity stocks as the price of oil fell to $90.95 vs. yesterday's price of $91, by the end of Asian trading.
dived 4.6%, to a new 52-week low of 31.52 yuan, while
Sinopec Shanghai Petrochemical
( SHL) dipped 1.6%, to 15.26 yuan, and
Aluminum Corp of China
tumbled 4.9%, to 36.99 yuan.
In Hong Kong stocks,
surged 7.5%, to HK$18.08, finishing as one of the island's biggest gainers. Among other telecoms,
jumped 1.84%, to HK$24.90, while
rose just 0.21%, to HK$140, and
slipped 1%, to HK$6.2.
Property stocks found favor with investors for the second day running, on hopes of a U.S. interest rate cut in December.
Sun Hung Kai Properties
Cheung Kong Holdings
added 1.7%, to HK$10.60, and HK$146, respectively, while
leapt 2.4%, to HK$92.20.
"Property prices are doing very well -- they are the best-performing among the Hong Kong markets this week, having moved 17%," says Winner Lee, an associate director of BNP Paribas in Hong Kong. "Investors have been putting money away in banks, and now they are buying properties."
Lower fuel prices cheered investors of
, which jumped 2.3%, to HK$20.45. After selling off nearly 20% in November, as the price of fuel declined this week Hong Kong's leading air carrier gained popularity among Chinese bargain hunters.
Still, Lee says that stocks in Hong Kong continue to appear "relatively expensive" to foreign investors right now, and that markets may continue to consolidate. She points out that curtails by the Chinese government on money laundering between China and Hong Kong are trapping liquidity on the mainland right now, too.
"Some banks in Shenzhen are now trying to stop people from drawing Hong Kong dollars, because people have been 'backpacking' the currency through to Hong Kong and engaging in investment activities," says Lee.
Financials in Hong Kong were flat but in negative territory, with
China Life Insurance
off 0.12%, to HK$42.40, and
down 0.15%, to HK$132.
Daniel M. Harrison is a business journalist specialising in European and emerging markets, in particular Asia. He has an MBA from BI, Norway and a blog at
. He lives in New York.